NFLX is due to publish its third-quarter 2022 earnings results on October 18, after the market close. As the company says, we have to expect total annual revenues to increase 4.7% to $7.838 billion and wait for $2.14 earnings per share, which means a 20% decline compared with a year ago. However, Zacks’s Consensus Estimate for earnings is currently pegged at $2.12 per share, which will increase the decline by over 33.5% from a year ago. The consensus revenue estimate for Q3 is $7.85 billion, which is 4.91% more than the same quarter of 2021.
Signs say it is a buy stock!
Compared with the third quarter of 2021, in which the company could add 4.4 million subscribers, and after a loss of 970,000 subscribers in the second quarter of 2022, Netflix says that it could add about 1 million subscribers over the quarter. While NFLX trying to reach more markets and users with new content, the presence of competitors who are now stronger and people who are no longer in home quarantines are the main challenges. Besides that, with about a 20% value increase of US dollars, it is now more expensive for non-US citizens to subscribe, which is a negative point for that and one of the reasons that in the second quarter, operating margins lowered to 19.8%, down from about 25% in the second quarter 2021.
From the technical point of view, after an almost 70% decline from 2021 high, the price returned to an upward trend, however, still, its stock price remains undervalued. While technical indicators remain bullish in the main charts, they also planning to launch a new ad-supported offering in the coming months, which means with even slight positive reports, we can count on it as a buy stock. $292, $394, and $485 are the next targets for NFLX stock price.