Key Takeaways:
- Netflix will release its quarterly earnings report on Tuesday
- The stock price of the media streaming giant has rallied over 6% ahead of the report
- The company has lost around 1 million subscribers this year
YEREVAN (CoinChapter.com) — The stock price of subscription-based media streaming site Netflix(NFLX) rose sharply on Monday. The price action comes a day before the release of the Netflix earnings report for the third quarter (Q3) between July to September.
Shares closed Monday 6.6% up from the previous day amid higher Netflix earning expectations by investors. Analysts hope the company will report revenue growth of around 5%, the lowest increase in any quarter.
Meanwhile, despite Monday’s rally, Netflix’s losses year-to-date still amount to around 60%. The streaming giant opened the year at $597.37 on January 3, 2022. Since then, its steady decline has seen the price fall to as low as $162.71.
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Netflix(NFLX) Struggles To Attract Subscribers
The media streaming giant suffered heavy losses at the start of the year after its subscribers began ditching it. The company lost about 1 million subscribers in the first half of this year.
Netflix’s subscriber drop comes amid rising competition from rivals. While Amazon Prime has made a dent in its mpire, Disney’s services have taken a big bite out of its earnings.
Disney+, Hulu, and ESPN jumped from 196.4 million subscribers in January to 221.1 million in Q2 of 2022.
The nearly 60% drop in the company’s stock value has cost the company dearly. About $200 billion has been wiped out of its market cap as a result. Meanwhile, investors will focus on the subscription numbers when the Netflix earnings report comes out tomorrow.
An improvement in the number of subscribers will help the company recoup some of its losses to date. However, should the numbers show a further plunge in subscribers, the company will see its stock price fall even further.
While investors hope for a course reversal, some analysts argue that Netflix could report a 30% drop in its earnings per share.
Battered by the drop in subscriber numbers, the company will introduce an advertising-supported plan in November. Under the new plan, the streaming giant will charge just $7 per subscription. It currently costs patrons $9.99 for Basic, $15.99 for Standard, and $19.99 for Premium.
However, despite all this, Netflix remains the most popular streaming service with around 221 million subscribers.
