Is Netflix a Buy Before the Next Earnings Release?

Netflix (NASDAQ: NFLX) will release its third-quarter earnings on Oct. 16 and investors are anxious to hear the results after share prices dropped 30% from its 52-week high of $396 per share. Competition is turning up the pressure for Netflix to perform, looking for an increase in paid memberships while keeping current members in their seats.

The second quarter of 2019 was disappointing, showing a paid membership growth of 2.7 million subscribers -- which was well under the five million membership projection. Management expects the third quarter to grow by 7 million memberships, 6.1 million memberships higher than the same quarter in 2018. Breaking the 7 million expectation apart, 0.6 million are expected within the U.S. and 6.2 million internationally. The operating margin target of 13% is expected to be unchanged, which is in line with the 2019 fiscal guidance, up 3% year over year.

Data source: Netflix. Chart by author.

Source Fool.com