Streaming giant Netflix, Inc. (NASDAQ:NFLX) is slated to report its third quarter Fiscal 2022 results on October 18, after the market closes. The company has been reeling from the impact of a diminishing subscriber base, stiff competition, slow advertising spending, and a tough macroeconomic backdrop. Amid these challenges, NFLX stock has plunged 61.5% so far this year.
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The Street expects Netflix to post a diluted profit of $2.17 per share in Q3, significantly lower than its prior-year period’s figure of $3.19 per share. Meanwhile, revenue is pegged at $7.84 billion, representing a year-over-year jump of 4.8%, but 1.6% lower than Q2FY22 revenue of $7.97 billion.
Meanwhile, Netflix has forecast that it will add up to 1 million subscribers in Q3, representing a 3.8% year-over-year growth. The important U.S. and Canadian markets remain a drag on Netflix’s subscriber growth. However, Netflix may have attracted more subscribers from the Asia-Pacific region in the quarter.
Notably, Netflix is launching a cheaper ad-supported subscription plan in November to attract new subscribers plus add back lost ones. According to the Wall Street Journal, the company has geared strong efforts to increasing the amount of time its subscribers spend watching Netflix. Also, the company is limiting the password-sharing feature in some of its plans to increase subscribers. However, the full impact of these will only be visible in the fourth quarter.
Wedbush Analyst Remains Optimistic about Netflix
Interestingly, Wedbush analyst Michael Pachter expects Netflix to report global net paid subscriber additions of 1.45 million in Q3. Also, Pachter expects the company to maintain its $1 billion free cash flow guidance for 2022 and generate incremental free cash flow going ahead.
Moreover, Pachter believes that Netflix will be able to limit subscriber churn with the launch of its new ad-tiered subscription plans. Based on these, the analyst is confident about NFLX stock achieving his $280 (21.7% upside potential) price target within the next 12 months and reiterated a Buy rating.
What is the Prediction for Netflix Stock?
On TipRanks, the average Netflix stock prediction is $248.45, which implies an 1.4% upside potential to current levels. Also, analysts have a Hold consensus rating on NFLX stock based on ten Buys, 15 Holds, and five Sells.
