Netflix earnings coming up after the close
Netflix will report earnings after the close today it will be a big report for the streaming giant, and even bigger for hedge fund titan David Einhorn. He's struggling with a high-profile Tesla short but he's changed the channel today after revealing he built a large Netflix short position in the fourth quarter of the year.
The company had a wild run for years and went parabolic in 2018 but since then it's consolidated in a wedge. The pattern looks like it could continue to run but you can't rule out a breakout.
"To the extend the market sees the NFLX growth story as 'busted' there is a lot of downside here," he said.
The short thesis is that other entrants into the streaming space, including Disney+ will eat into Netflix's advantage and dampen profitability. BMO forecasts the company will invest $17.3 billion in content this year.
Netflix "is no longer the only value-priced" streaming company, Einhorn wrote.
In terms of today's report, here's what's expected on the financial side:
- EPS, Adj 0.748
- EPS, GAAP+ 0.53
- Revenue $5.452B
- Net income $335.25M
- Operating profit $490.813M
Other metric to watch include average revenue per user, international growth, US margins and subscriber engagement. Importantly, analysts also see an increase of 7.65m total paid users with international accounting for 7.15m of that. That would put overall streaming paid memberships at 165.71 million.
