Netflix, Inc. (NASDAQ:NFLX) plans to announce September-quarter results after the market close on Oct. 16
Even if Netflix (NFLX) beats Wall Street’s targets next week with its third-quarter report, it may not be enough to satisfy skeptical investors. The big test for Netflix stock will come later this quarter as rivals Apple (AAPL) and Walt Disney (DIS) enter the internet television market.
Netflix plans to announce September-quarter results after the market close on Oct. 16. In the second quarter, it badly missed its subscriber forecasts. It also posted its first-ever drop in domestic streaming subscribers following a price increase.
The Los Gatos, Calif.-based company said it expects to add 7 million new streaming subscribers in the third quarter, including 800,000 in the U.S. and 6.2 million in international markets. It ended the second quarter with 151.6 million subscribers worldwide, including 60.1 million in the U.S. and 91.5 million in foreign markets.
Wall Street expects Netflix to earn $1.05 a share on sales of $5.25 billion, according to Zacks Investment Research. That would translate to year-over-year growth of 18% in earnings and 31% in sales.
Netflix Has Low Bar To Clear For Third Quarter
The bar is set low for Netflix’s report, Nomura Instinet analyst Mark Kelley said in a report to clients Monday. However, its results “don’t matter much given the Disney+ launch coming in November,” he said.
Any softness in Netflix’s business in the fourth quarter will be blamed on Disney+, which debuts on Nov. 12, he said. Apple’s Apple TV+ service launches on Nov. 1.
Evercore ISI analyst Vijay Jayant on Monday reiterated his in-line rating on Netflix stock and cut his price target to 300 from 380.
Netflix stock fell 1.4% to 270.72 on the stock market today.
“Sentiment has clearly turned incrementally negative over the last three months, with Netflix shares down nearly 30% from levels immediately preceding the company’s Q2 earnings report in July,” Jayant said in his note to clients.
He added, “With net subscriber additions potentially peaking this year, and ahead of a number of new internet TV service launches from well-capitalized competitors over the coming months, questions about the company’s business model now abound.”
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 303.57.
The projected upper bound is: 286.53.
The projected lower bound is: 252.43.
The projected closing price is: 269.48.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 81.1906. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 41.72. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 9 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 48. This is not a topping or bottoming area. The last signal was a buy 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 3 period(s) ago.
Rex Takasugi – TD Profile
NETFLIX INC closed down -3.740 at 270.720. Volume was 15% below average (neutral) and Bollinger Bands were 6% wider than normal.
Open High Low Close Volume___
273.030 275.530 270.643 270.720 6,302,269
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 268.25 291.61 335.19
Volatility: 28 37 45
Volume: 8,245,445 7,492,938 8,211,155
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NETFLIX INC is currently 19.2% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of NFLX.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on NFLX.O and have had this outlook for the last 15 periods.