In a research note published on Wednesday, September 7th, stock analysts from Jefferies Financial Group reduced their Q4 2022 earnings per share expectations for shares of Netflix. A. Uerkwitz, an analyst with Jefferies Financial Group, has reduced his initial estimate of $2.07 to $1.83 per share for the quarter for the Internet television network. As far as the Netflix India share price is concerned, the current full-year earnings expectation for Netflix is $10.03 per share. Jefferies Financial Group estimates that Netflix’s FY2022 earnings are $10.66 per share, $13.71 per share in FY2024, $17.39 in FY2025, and $22.61 in FY2026.

The Internet OTT platform exceeded analysts’ consensus projections by $0.24, posting $3.20 EPS for the quarter. During the quarter, the company’s revenue came in at $7.97 billion versus analysts’ expectations of $8.03 billion. The net margin for Netflix was 16.42%, and the return on equity was 30.07%. Compared to the previous year’s quarter, Netflix’s quarterly revenue grew by 8.6%. The company generated $2.97 EPS during the same time last year.

Other brokerages have lately slashed their targets on NFLX as well, which might be insightful for those who want to invest in Netflix:

• In a report on Thursday, June 30th, Truist Financial decreased its price target on Netflix shares to $210.00 from $300.00 and reaffirmed a “hold” rating for the organization.
• In a report on Thursday, July 7th, Citigroup lowered their target price on Netflix shares to $275.00 from $295.00 and reaffirmed a “buy” rating for the organization.
• In a report on Thursday, July 14th, BMO Capital Markets lowered its price target on  Netflix shares to $365.00 from $405.00 and assigned the company a “outperform” rating.
• Benchmark established a $157.00 target cost for Netflix and downgraded the stock from a “hold” ranking to a “sell.” on Tuesday, June 14th, in a report.
• In research released on Friday, July 15th, UBS Group lowered its target cost on Netflix shares to $198.00 from $355.00 and reaffirmed a “neutral” rating for the business.
• Twenty-four analysts gave the stock a hold rating, while thirteen analysts gave the stock a buy rating. Conversely, the stock was rated as a sell by six analysts.
• The stock has an average target price of $318.65 and a consensus recommendation of “Hold,” as per data from MarketBeat.

The OTT War

As someone interested in keeping track of the Netflix India share price, you should also be aware of the current OTT war in the sector. When Netflix released House of Cards, the first-ever original series, in 2013, it marked a significant turning point for online video streaming. Until that point, older TV episodes and films that had already been shown on television or distributed in theatres were the majority of the content that Netflix, Amazon, and other streaming services purchased.

By demonstrating that it could produce high-calibre material that audiences in the millions would watch, Netflix changed the balance of power with this action. In addition, it would introduce some of the most well-liked television programmes of the following few years, such as Orange is the New Black, Narcos, and Stranger Things.

With the release of Mr Robot and The Man in the High Castle in 2015, Amazon followed suit. Even Hulu, another streaming platform controlled by the four major US media conglomerates to counter Netflix’s popularity, started producing its own content. Netflix has boosted its content spending every year as a result of expanding subscription numbers (from 60 million to 110 million within three years). It increased its content spending to $17.3 billion in 2020 from $15.3 billion in 2019. Studios for movies and television have changed during the previous ten years. AT&T (parent of WarnerMedia and HBO), CBS, Comcast (with NBC), and Disney all established streaming services to compete with Netflix. Channel 4 and ITV both introduced streaming apps in the UK.

In response to the growing number of consumers cutting the cord, Hulu has raised all of its pricing. The streaming giant revealed its monthly membership prices would increase beginning on October 10 through an email to the company’s more than 41 million users on Tuesday. At that time, the advertisement-supported tier would increase by 14% from $6.99 to $7.99 per month, or $79.99 annually. In addition, the cost of the premium plan, which completely eliminates commercials, will rise from $12.99 to $14.99 per month without the previous option of a yearlong subscription.

With the recent price increases, Hulu is now almost as pricey as its rivals Netflix and HBO Max, even though Netflix is soon to launch a more reasonably priced advertisement-supported version. As the other Disney-owned subscription services are rolling out pricing increases, subscribers are getting ready for them before the corporation launches its very own advertisement-supported edition of its main streaming platform in December.

The cost of ESPN+ has already increased from $6.99 to $9.99 per month, and to $99.99 from $69.99 per year. Disney+ will also increase its fees starting on December 8 when it introduces a new tier that includes advertisements for $7.99 per month, which is what it now costs without commercials. As reported by The Hollywood Reporter, the cost of the premium, advertisement-free variant of Disney+ will then rise to $10.99 per month or $109.99 per year, a $3 monthly rise or a $30 annual increase. Due to these modifications, Disney’s streaming bundle prices will also alter. A new basic package will now cost $9.99 per month, including Disney+ and Hulu with advertising but excluding ESPN+.

Netflix and its content conundrum with content vis-a-vis slowing growth

As you conduct research on how to buy Netflix share in India, you may also want to take a look at its growth in recent times. Netflix, the most widely used streaming service globally, struggles to maintain its third-place ranking in India. The Netflix India share price is being affected by a number of factors, some of which are listed below:

• Content expenses per subscriber

Depending on the programming that is offered during the quarter, Netflix’s average monthly cost per subscriber varies. The second quarter’s amortized spend was higher than it was in the first due to the release of new seasons of high-priced originals like “Ozark” and “Stranger Things,” both of which are in their fourth seasons. In addition, estimates show that Netflix will spend roughly 65% of the company budget on foreign content in 2021, which is a higher percentage than in previous years, thus impacting the Netflix India share price. Since 2016, the corporation has focused more of its spending on international rights, and this is what is anticipated to continue in the future. Over the past few years, this local focus has aided the rapid subscriber development in areas outside of the United States and Canada.

• Slowing growth

For the very first time in more than ten years, Netflix reported a decline in subscribers from one quarter to the next. As a result, the Netflix India share price has been impacted. Considering that it has 222 million subscribers total, the 200,000 drop may not seem like much, but it could signal the beginning of a negative trend. In fact, management expects a two million sub-loss in the upcoming quarter. In other words, when revenue growth slows, Netflix will regulate the company to prevent a decline in operating margin.

Therefore, it comes as no surprise that it just announced the termination of 150 employees. Netflix’s content spending plan may be the next thing to go. To put that sum into perspective, consider that at the same period, Netflix’s revenues totaled $7.9 billion.

Source: https://www.fool.com/investing/2022/05/20/more-evidence-emerges-of-netflix-slowing-growth/

• NFLX’s latest quarterly earnings highlights and price targets 

The EPS of the company is at $3.20 versus the $2.94 expected. Netflix had previously informed investors that it anticipated losing about 2 million subscribers during the previous quarter, but it only lost about 970,000 over the three months ending on June 30.

The business presently has 220.67 million customers and anticipates third-quarter net adds to be at least 1 million, recovering some of the year’s first-half losses. According to analysts, Netflix was expected to guide for expansion of about 1.8 million. However, last quarter, Netflix acknowledged its weak revenue growth, which it blamed on competition, account sharing, and additional issues like the conflict in Ukraine and slow economic growth.

Source: https://www.wsj.com/market-data/quotes/NFLX/research-ratings

Wrapping it up

Netflix keeps its attention on the content, providing big-budget movies through its platform rather than in cinemas and letting users binge-watch all-new episodes of the series – perhaps thus making more people ponder how to buy Netflix shares in India. According to the corporation, season four of “Stranger Things” was a massive success for the brand. It not only set new milestones for the firm in terms of viewership but also was nominated for a number of 2022 Emmy awards.