Investors are focused on learning the number of U.S. subscribers Netflix (Nasdaq: NFLX) added in the fourth quarter and how many more subscribers the company's management thinks it can add before April, as the company prepares to report its quarterly operating results Wednesday afternoon.
(Image courtesy of Netflix)
"We believe investors are now focused on 1Q subs guidance to determine whether NFLX Domestic opportunity is maturing," Arvind Bhatia, an analyst with Sterne Agee wrote in a note to investors.
Bhatia expects Netflix to have ended 2013 with 33 million U.S. streaming subscribers and another 10 million international subscribers. Add in about 7 million U.S. DVD subscribers and that would put Netflix's total subscriber count at about 50 million. If the company doesn't keep adding new subscribers, investors could bolt, Bhatia wrote.
"For a momentum stock such as Netflix, even a slight slowdown could have a material impact on the stock," Bhatia wrote.
In a report issued earlier this month, Needham & Co. analysts Laura Martin and Dan Medina said that Netflix is one of their top picks for online media stocks in 2014. "Our view is that binge viewing habits are entrenching NFLX with viewers more each day in the U.S. and we believe that Wall Street underestimates the value being created through its geographic expansion strategy."
The company could also face questions from stock analysts Wednesday about how the D.C. Circuit Appeals Court's decision to overturn much of the FCC's open Internet rules will affect its business, a New York Times report said.
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