Getty Netflix CEO Reed Hastings.
- Netflix is edging up ahead of its second-quarter earnings report, set to be released after the closing bell on Monday.
- International subscriber additions will be closely watched.
- Cash burn will be another investor focus.
- Netflix has smoked the market this year.
- Watch Netflix trade in real time here.
Netflix shares are edging up as much as 1% to just above $399 apiece in the final hour of trading Monday, ahead of its second-quarter earnings report.
Analysts are expecting adjusted earnings per share of $0.92 on revenue of $3.94 billion, according to Bloomberg.
They're also expecting a net addition of 5.01 million international subscribers, which Craig Huber, the founder and CEO of Huber Research Partners, told Business Insider is "quite impressive and likely will be conservative." The company guided that it would net 5 million new international subscribers this quarter.
Mark Mahaney, an analyst at RBC Capital Markets, wrote that Netflix's EU penetration is already "rising sharply." His survey found that a record 37% of respondents in France used Netflix this quarter, and a record 35% of respondents in Germany used the streaming service. Willingness to spend money on entertainment streaming also rose considerably in France and Germany from last year, as did user satisfaction levels.
Netflix is ramping up marketing spend to cash in on the international opportunity.
Other analysts aren't so hot on the stock, even if they believe in the company. UBS analyst Eric Sheridan wrote in a recent note to clients that international growth is "all priced in."
Netflix has been one of the most explosive US stocks this year, gaining more than 100%, and hitting above $400 a share for the first time. The late-June rally that got shares to that level was on the back of a Goldman Sachs note out to clients from analyst Heath Terry. It said "2018 will be the peak negative free cash flow year for Netflix, with revenue growth beginning to outpace content spend growth next year."
Huber pointed out that if Netflix beats on earnings estimates, the stock could pop. "You want to own this stock ahead of earnings, he said.
Netflix is up 107% this year.
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