Netflix, Inc. (NASDAQ:NFLX) is hours from reporting its fourth quarter and full year earnings in the earnings call. Netflix, Inc. (NASDAQ:NFLX) had a fantastic 2014, when it had crossed 50 million subscribers globally, but even though it met the expectations on revenues, it missed the subscriber growth expectation for third quarter, due to which the stock stumbled towards the end of the year. Will the fourth quarter results meet the streets estimates and help the stock on its way up? S&P Capital IQ Analyst, Tuna Amobi talked on CNBC about what are the numbers in the Netflix, Inc. (NASDAQ:NFLX)’s report that would interest the investors like him and propel the stock higher.
Amobi mentioned that other than profits and revenues, all the investors including him would be looking forward to see the subscriber growth for Netflix, Inc. (NASDAQ:NFLX) both in US and globally. He added that Netflix, Inc. (NASDAQ:NFLX) had hiked the subscriber fees in May 2014, due to which the subscriber growth in US slowed for third quarter. He said that he would be interested to see if that effect carries on into the fourth quarter as well or not. He mentioned that globally Netflix, Inc. (NASDAQ:NFLX) has added subscribers in Western Europe and he said that he would be interested to look at that as well.
“I think the content spending is always going to be in focus. They have got almost $9 billion of streaming content obligations. They are spending on marketing. International expansion, I think they have guided to additional losses there, but I think the swing factor is going to be how much traction they are getting in some of the latest international market. We expect the margins in the US to continue to expand, potentially reaching the high 30%. So those are some of the potential upsides. On the flipside we think that the international is going to determine whether the company continues to sustain profitability overall in 2015,” Amobi said.
He thinks that the recent developments in ‘Net Neutrality’ will act as a tailwind for Netflix, Inc. (NASDAQ:NFLX), because he said that Netflix, Inc. (NASDAQ:NFLX) has been always against paying the broadband providers for connection.
Amobi thinks that in spite the heavy competition from Amazon.com, Inc. (NASDAQ:AMZN), Hulu and other cable TV provider, Netflix, Inc. (NASDAQ:NFLX) will continue to lead the industry in 2015. He feels that Amazon making feature films will not be a short term concern for Netflix, Inc. (NASDAQ:NFLX), but it will be a medium to long term risk for them, which they will have a lot of time to react to
Disclosure: None
Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.
