Netflix, Inc. (NFLX) shares are up 29.91% in 2019, with most of those gains made in January. Wall Street has its eyes on this growth juggernaut as the streaming wars are heating up.


Just last week, The Walt Disney Company (DIS) released details on its upcoming streaming service, Disney+. Traders liked what they heard, sending Disney shares to all-time highs on massive volumes. Will Disney be an adversary in the quickly growing streaming space? Only time will tell. So far, Netflix has been the one clear leader in the space.


Looking back at 2018, Netflix:


  • grew revenues 35% to $16 billion
  • nearly doubled operating profits to $1.6 billion
  • closed out 2018 with 139 million paid memberships, up 29 million from the beginning of the year


Looking ahead to Q1, Netflix guided:


  • 8.9 million paid net additions (up 8% year over year)
  • U.S. additions of 1.6 million; international additions of 7.3 million
  • Year-over-year revenue growth of 21%


Below is the net adds forecast from the company:


Netflix Q4 shareholder letter

Netflix shares have seen massive returns over the past few years as the company has invested heavily in content to woo consumers. The stock price has been range bound the past couple of months as the Street looks for more clarity from the company. Depending on Tuesday’s results, we could see shares move out of the recent range of $340 to $380. Looking at the options market, the April at-the-money (ATM) straddle is implying a move of around 7.57%, or a roughly $26 move in the shares.


The Bottom Line

Netflix is slated to report earnings on Tuesday after the close. The shares tend to be volatile after reporting. With the recent details for Disney+ announced last week, this earnings report may be one of the most important for Netflix, as Wall Street sees Disney as a formidable foe in the streaming space.


Disclosure: The author holds a long position in Netflix shares at the time of publication.




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