Netflix Q4 Preview: Will Warner Bros. Chaos Steal 'Stranger Things' Thunder?

Core Viewpoint - Netflix is expected to report strong fourth-quarter results, driven by the success of "Stranger Things" and NFL games, but uncertainty surrounding the Warner Bros. Discovery merger may impact stock performance [1][5]. Financial Performance - Analysts predict Netflix will report fourth-quarter revenue of $11.97 billion, a 16.8% increase from $10.25 billion in the same quarter last year [2]. - Expected earnings per share for the fourth quarter are 55 cents, up from 43 cents per share in the previous year [2]. - Netflix has beaten revenue estimates in eight of the last ten quarters, although it missed both earnings and revenue estimates in the third quarter [3]. Analyst Insights - Analysts have been lowering their price targets for Netflix stock, with Rosenblatt maintaining a $105 target while expressing concerns about the merger timing [4]. - Wedbush analyst Alicia Reese maintains an Outperform rating but has reduced the price target from $150 to $115, citing steady performance and subscriber growth [8]. - Analysts highlight Netflix's low churn rates and the impact of price hikes and advertising strength on revenue growth [7]. Subscriber and Viewership Trends - The fifth season of "Stranger Things" set a record with 59.6 million views in its first week, contributing to strong subscriber engagement [8]. - NFL games on Christmas Day achieved significant viewership, with the Detroit Lions vs. Minnesota Vikings game averaging 27.5 million viewers, setting an NFL U.S. streaming record [9]. - The live sports viewership is seen as a potential catalyst for Netflix's advertising business, appealing to advertisers due to the live nature of sports events [10]. International and Licensing Opportunities - The NFL games were viewed by Netflix customers in over 200 countries, which could enhance international subscriber growth and advertising revenue [11]. - The company is also exploring licensing opportunities, such as "KPop Demon Hunters," and expanding into live interactive experiences [11]. Stock Performance - Netflix stock is currently trading at $87.97, within a 52-week range of $82.11 to $134.12, reflecting a 4.4% increase over the past year [13].