Netflix is reporting its finance or earnings report on Wednesday, and analysts are advising investors to focus on subscriber growth.
The company has suffered from tighter competition, turning Netflix into the worst-performing FAANG stock.
In July, the company reported that it lost US streaming subscribers in the second quarter. It also said subscriber growth slowed down very much.
Consequently, the company’s shares plummeted 25% in the past three months on stock exchanges. On the other hand, it’s still up more than 5% this year.
Netflix has offered its profit guidance previous. It estimates revenue to be up 31.3% year-on-year to $5.25 billion. Earnings per share will be $1.04.
Subscriber growth will be the central focus of this quarter. In the second quarter, it missed its previous guidance of 5 million new subscribers. It only got 2.7 million new subs.
Finance Estimates, Competition
For this earnings season, Netflix estimates to add 7 million new subscribers. This level is a significant improvement from previous figures.
At the same time, it’s higher than the 6.1 million it reported last year in the same period.
Competition for the company is also getting tighter and crowded as it deals with newcomers in the streaming industry.
The Disney+ streaming service is launching on November 12. Netflix will have to battle with aggressive pricing strategies.
That’s because Disney+ is charging $6.99 per month, while Netflix’s standard plan is $12.99.
It will be a tough road ahead for Netflix, as Disney owns Marvel, Pixar, Lucasfilm, and Disney Studio. But it’s only one competitor.
Apple is also launching its Apple+ streaming service in November. Its monthly subscription fee, $4.99, is also very much lower than that of Netflix.
Other competitors include HBO Max and Comcast.
It would also have to deal with existing rivals like Amazon, Hulu, CBS, and YouTube.
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