How To Trade Netflix Ahead Of Quarter Earnings in April? (NASDAQ:NFLX)

Video streaming giant Netflix Inc (NASDAQ:NFLX) has been one of the best growth stocks in recent times. However, due to the overall turmoil in the markets in the fiscal first quarter, investors are going to watch the company’s earnings report closely. In such a situation, it is worthwhile to ponder whether it could be a good idea to buy the Netflix stock ahead of its earnings announcement.

Key Metrics To Watch

If the company can manage to beat analysts’ estimates for the quarter and also provide better than expected projections, then there is a possibility of the stock recording considerable gains.

Netflix has projected that it is going to earn revenues of $5.73 billion in the fiscal first quarter, and its earnings per share for the period is expected to be $1.66 per share. Those figures are in line with analysts’ estimates. On the other hand, the lockdowns across North America should also come as a boost for the company, since hundreds of thousands of people are cooped up at home and are likely to spend a lot of time on services like Netflix.

However, it needs to be seen whether that has led to a boost in subscriber base. The company surpassed 100 million subscribers in its international markets in the fourth quarter.

In the United States, it has a long term target of hitting 60 million to 90 million subscribers. On the other hand, the company is also spending heavily on ‘local originals’ in its international markets in order to further boost its subscriber base. Netflix Originals have proven to be a significant driver of growth for the company in many markets, and the company is expected to double down on such investments.

Whether  Netflix surpasses analysts’ estimates in this quarter could be largely irrelevant if an investor has a long term view. At the end of 2019, it had 167.1 million subscribers and that reflected year on year growth of 20%. Hence, Netflix could well remain a solid bet even if there are setbacks in the short term.

About Travis Garlick 1679 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.