Netflix is surging as Wall Street anticipates another earnings beat (NFLX)

pulse

April 11, 2018 3:56 PM

Goldman Sachs expects yet another breakout quarter for the streaming giant.

Goldman Sachs expects the company to beat expectations for subscriber growth.

Shares of Netflix were up more than 4.5% — the most of any Nasdaq equity — at $310.65 Wednesday morning as Wall Street analysts gear up for the streaming company's earnings next week.

"We continue to believe that Netflix is likely to report 1Q results above consensus expectations on the back of a strong content slate, newer distribution partnerships, and the initial impact of marketing investments," Goldman Sachs analyst Heath Terry said in a note to clients Wednesday.

The bank expects the company to report 1.7 million new domestic subscribers and 5.6 million abroad — that's above the company's guidance of 1.45 million and 4.9 million respectively, and in line with the company's continuing trend of faster growth abroad than at home.

"We remain significantly above subscriber net add consensus expectations on internationaland domestic for 2018 driven primarily by the growth in content spend, expected marketing deleverage, and expansion of the distribution ecosystem," Goldman Sachs said.

Netflix CFO David Wells said earlier this year that the company expects to spend a staggering $8 billion on about 700 new original shows in 2018.

Goldman remains more bullish on the stock than many others on the Street, with a price target of $360, a full 20% above where Netflix was trading Wednesday and well above analysts' average target of $290, according to Bloomberg.

Netflix will report earnings on Monday, April 16. Analysts polled by Bloomberg expect the company to report adjusted earnings of $0.638 per share on revenue of $3.61 billion.

Shares of Netflix have gained 54% since the beginning of 2018 — well outpacing its FAANG peers, of which the second-largest gainer is Amazon, up just 23%.