Netflix (NFLX) will report fourth quarter results in a Letter to Shareholders on its website soon after the bell.

The earnings interview with management including Chief Executive Reed Hastings starts at 18:00 ET. 

After missing second quarter estimates and guiding down last July, Netflix bounced back with strong third quarter results and fourth quarter guidance in October. That said, the stock quickly got smacked and its post-earnings gains were wiped. It made new lows as high-multiple growth stocks got wrecked during the late 2018 correction. 

Analysts are predominantly bullish heading in to the print.

Netflix has guided for fourth quarter EPS of $0.23 (vs. $0.41 last year) with an operating margin of 4.9% (-260 basis points year/year) and revenue up 28% to $4.20 bln.

Netflix also guided for 7.6 mln global paid net subscriber additions (1.5M in the U.S. and 6.1M for the international segment) vs. 6.6 mln adds in the fourth quarter of 2017. 

Netflix continues to burn cash as it starts to produce more of its own content.


For 2019 Netflix has:

  • ~$153 bln market value

  • ~Trades at 54x EBITDA estimates

  • ~85x EPS estimates and

  • ~8x revenue estimates

The extreme valuations reflect the company's strong growth prospective and market position as the clear leader in streaming.

The options market implies a ~8% move in the stock tomorrow.

Expectations are high as the stock is overbought on a short-term basis after rallying over 50% since hitting an 11-month low following the market carnage in late December. NFLX has been trading in a multiyear channel as you can see from the charts below.