Netflix (NFLX) is set to report Q3 results after the bell with the shareholder interview set to commence at 6:00pm ET.
Cap IQ Consensus estimates Q3 EPS of $0.32 (vs. $0.12 in 3Q16), w/revs of $2.97 bln (+29.6% y/y).
Last quarter Netflix reported Q2 net subscriber streaming additions of +5.2 mln (+1.07 mln in the U.S. and +4.14 mln international) which was better than prior guidance of +3.2 mln.
Netflix expects Q3 to come in around +4.4 mln (+0.75 mln U.S. and +3.65 mln international) for net adds.
- Target raised to $235 from $200 at Goldman (October 13th).
- Target raised to $225 from $210 at JP Morgan (October 13th).
- Target raised to $230 from $200 at Stifel (October 12th).
- Target raised to $225 at Morgan Stanley (October 11th).
- Target raised to $225 from $190 at UBS (October 4th).
- Total Streaming
- Revenue $2.9 bln
- Total Membership 108.35mln
- Net Adds 4.40 mln
- Domestic Streaming
- Revenue $1.553 bln
- Contribution Margin 37.1%
- Total Membership 52.67
- Net Additions 0.75 mln
- International Streaming
- Revenue $1.306 bln
- Contribution Margin 2.3%
- Total Memberships 55.68 mln
- Net Adds 3.65 mln
Based on NFLX options, the current implied volatility stands at ~44%, which is 48% higher than historical volatility (over the past 30 days). Based on the weekly NFLX October $200 straddle, the options market is currently pricing in a move of ~8% in either direction by October expiration (Friday).
The Q2 net subscriber additions beat caused shares of Netflix to close up 13.5% the following day to $183.60/share, and since their Q2 earnings on July 17th shares have rallied 25%. Year-to-date Netflix shares are up 61.1% vs. +14.1% for the S&P. For momentum to continue investors will be listening for signs of continued subscriber growth, especially internationally.