Netflix stock recently hit a new high, closing at $610.34 at the close of September.
For much of 2021, Netflix shares have trailed big tech rivals. Think Facebook, Apple, and Amazon. Its stock was in the red for 2021 as recently as August as investors worried it may have lost its mojo as consumers flocked to newer streaming platforms like Disney +, Apple TV+, Amazon Prime Video, HBO Max, Peacock, and Paramount+.
Now, that seems to be changing, in part because of its global mega-hit series ‘Squid Game.’ Netflix, which will report its third-quarter earnings on Tuesday, has enjoyed a massive turnaround in the past few months as users became addicted to South Korea’s ‘Squid Game.’
Indebted contestants in ‘Squid Game’ play children’s games for cash, but are shot dead if they fail. The fictional drama, about game show participants trying to survive dangerous contests, has created much-needed buzz for the streaming service since its global premiere in September.
More than 117 million accounts have already watched the dystopian series since its debut this year.
Netflix’s stock is now up 17% this year, better than that of Apple and Amazon and roughly in line with Facebook’s year-to-date rise. Shares in Google owner Alphabet have soared 60% in 2021, making it the best performer of elite tech stocks.
Will ‘Squid Game’ give more financial success to Netflix?
According to forecasts by Refinitiv, analysts expect that Netflix’s third-quarter revenue rose 17% from a year ago to $7.5 billion and that net income soared 47% to $1.2 billion, or $2.56 a share. But the number investors will be watching most closely is Netflix’s subscriber count. For one thing, the main reason Netflix’s stock stalled earlier this year was due to concerns about slowing user growth.
Wall Street estimates suggest that Netflix added about 4 million subscribers in the third quarter, for a total of 213.3 million worldwide. Analysts also predict an even bigger surge in users in the fourth quarter, an increase of more than 8 million to 221.4 million.
Also Read: Nigerian Fintech, Sparkle, Raises $3.1 Million to Scale Operations
The stakes are high
A council in the south of England has advised parents not to let their children watch Netflix’s ‘Squid Game,’ after reports emerged that children as young as six are copying its violent challenges.
Squid Game may have set a lot of records on Netflix, but it is going to fall short of a different record. The series has been knocked out of its number 1 position in Netflix’s Top 10 list in the US.
What’s more, Netflix’s stock typically thrives after earnings because of the company’s subscriber outlook.
There are signs that the company might be pressured to deliver a bullish forecast when it finally reports its earnings on Tuesday.
For one thing, many analysts are extremely upbeat about Netflix’s stock. If Netflix’s outlook disappoints, the stock could suffer a fate almost as violent as unlucky losers on “Squid Game.”
Join our Trading Community and learn how to trade Forex like a pro!
