The earnings report for the fiscal third quarter of Netflix (NFLX stock) is scheduled to be released on Tuesday after the closing bell. The report’s primary focus will be on specifics around a planned ad-supported format.
According to a compilation done by Bloomberg, the following is the consensus of Wall Street’s estimates:
Revenue is anticipated to be $7.85 billion.
Adjusted earnings per share (EPS) are anticipated to be $2.22.
New subscribers should total 1 million, according to projections.
As the focus shifts toward profitability and new income streams, such as the platform’s forthcoming ad-supported tier, it is widely predicted that investors will place less weight than in prior quarters on the company’s membership counts.
Most experts have not changed their optimistic outlook about the new ad tier’s potential for profit.
NFLX Stock Price Estimate
UBS analyst John Hodulik recently increased his price estimate on the company by $52 to $250 a share. In contrast, JPMorgan analyst Doug Anmuth stated that the ad tier’s lower pricing point of $6.99 in the United States indicated Netflix’s trust in advertising-income.
Citigroup analyst Jason Bazinet, who has a Buy rating on the stock, said that the upcoming ad tier “could point to the material upside” in free cash flow, and Evercore ISI’s Mark Mahaney predicted that ad-supported will bring in an additional $1 to $2 billion in revenue by 2024. Both of these predictions were made on Wall Street.
Jeremi Gorman, President of Netflix Worldwide Advertising, stated in a teleconference before the release of the new ad tier that the platform “almost sold out all of its [ad] inventory” globally for launch, bucking the trend of a downturn in the amount of money spent on advertisements throughout the world.
Jon Christian, executive vice president of digital media supply chain at Qvest, the most extensive media and entertainment-focused consulting business, commented to Yahoo Finance, “There is an ad spend slowdown in your conventional models, but this is all net new for Netflix.”
Advertising, the CEO continued, “brings in a new tier of customers that perhaps wouldn’t have ever subscribed previously.”
He said, “I think there may be a lot of income in this game,” highlighting the abundance of user data that Netflix can utilize to its advantage to entice advertisers. “I think this game might generate a lot of revenue.”
The business predicted that overall income would be neutral to positive with the similar plan, even though there are fears that customers will trade down to a tier reliant on advertisements.
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Author Valerie Remorosa 
