Netflix earnings preview: Set for fresh all-time highs?

• Netflix ↑ 45% year-to-date

• Shares could move 7.6% % ↑ or ↓ post-earnings    

• Subscription numbers & live sports offering in focus

• Technical levels – $735 & $700

Netflix is probably one of the first providers you think about regarding TV streaming services.

And it remains the biggest player in this space, boasting almost 280 million subscribers worldwide!

The company shares have been edging higher, hitting a fresh all-time high at $734.92 last Friday.

Despite the recent selloff, Netflix stocks are still up 45% year-to-date.

Prices could push higher or lower depending on how investors react to the latest earnings report.

• When will earnings be published?

Netflix will report its earnings for the third quarter after US markets close on Thursday 17th October.

• Market expectations:

The company is expected to post earnings per share of $5.12 compared to $3.73 a year ago.

Quarterly revenues are seen rising $9.8 billion from $8.5 billion in the prior year – equating to a 15.3% increase.

• Why is this important?

As the biggest streaming service in the world, Netflix’s results could provide key insights into consumer spending habits and the health of the streaming industry.

• Key metrics…

When publishing its earnings for Q2 back in July, Netflix reported just under 278 million subscribers.

So, it will be interesting to see what impacts the crackdown on password sharing have on this number.

According to analyst expectations, the streaming giant is expected to report around 286 million active subscribers for Q3 – further solidifying its grip on the throne.

Investors will be looking for more information on live sports offerings, especially when considering how the NFL will see its first games on Netflix on Christmas Day.

• Potential challenges

In such a competitive industry filled with the likes of Amazon Prime, Disney+, Hulu and Apple TV among others, investors will be keen to see how Netflix fared.

Consumers are spoilt for choice for quality streaming services, and this has the potential to impact the company’s overall results.

• How will Netflix react to earnings?

Markets are forecasting a 7.6% move, either Up or Down, for Netflix stocks on Thursday post earnings.

• What does this mean for prices?

A 7.6% move up from $704.56 (current price) will take Netflix shares to a fresh all-time high at $758.

While a 7.6% move down will send prices back toward $651.

• Technical picture

Although prices have been trending higher on the daily charts, a range can be identified with support at $700 and resistance at $734.92. The incoming earnings report could push the scales of power in favour of bulls or bears.

• A solid set of earnings could push prices back above the all-time high at $734.92 with $750 acting as a point of interest.

• If the earnings disappoint, prices could slip below $700 – opening a path back toward the 100-day SMA at $670 and $650.