Netflix (NASDAQ:NFLX) is scheduled to report second-quarter results on July 19 and with the stock down more than 70% year-to-date, investment firm Monness, Crespi, Hardt said the streaming giant's "nightmare" looks set to continue.
Analyst Brian White, who rates Netflix (NFLX) shares neutral, noted that although the content on the service has been "exceptional" over the past couple of years, its business is under attack on multiple fronts and it's likely that the company barely grows this quarter.
"Our [second-quarter] sales forecast reflects a 2% [quarter-over-quarter] increase, below the four-year average of up 6% for past June quarters," White wrote in a note to clients. The analyst estimates revenue will come in at $8.043B and earnings per share will be $3.01, compared to estimates of $8.046B and $2.95, respectively.
In addition, White noted that Netflix (NFLX) is likely to lose 2.1M subscribers this quarter to bring its total to 219.5M, slightly above Netflix's previous guidance of a loss of 2M. Of those, 600,000 should come from U.S. and Canada, while Europe, Middle East and Africa should lost 1.8M and Latin America should lose 400,000.
Asia Pacific is the only region forecast to grow, as White estimates the area will add 700,000 subscribers.
Netflix (NFLX) is trying to turn around its struggling business, recently confirming that it would introduce an advertising-supported tier. Conversely, HBO Max (WBD), Discover+ (WBD), Peacock (CMCSA) and Paramount+ (PARA), already have advertising-supported tiers, while Disney+ (DIS) is set to do so later this year.
The company has continued to put out strong content, as evidenced by the recent explosion in viewing of the fourth season of StrangerThings, though that was aided by supersized episodes.
Other series such as Bridgerton: Season 2 and the global phenomenon Squid Game have also resonated well with viewers and Netflix (NFLX) is doubling down on that success with a reality show based off the hit series, Squid Game: The Challenge.
On Tuesday, it was reported that Netflix (NFLX) is in talks to revamp its content deals with Hollywood studios as part of its new advertising-supported streaming TV option.
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