Netflix Inc. (NFLX) is due to announce quarterly earnings for Q42021 on the 20^th of January 2022, and analysts at Credit Suisse have weighed in their opinions on the streaming giant, stating “investor interest is as low as we have seen the past eight years”. This is due to a larger number of competitors entering the market across the 190 countries where NFLX’s streaming services are available. Investors are keen on seeing if the company’s large content translates into a large subscriber base, which currently stands at 214 million. More interest is now being shown in the generation of margins and positive cash flows, with the company expanding into alternate areas including the introduction of video games, to increase engagement and differentiate its service.

A key focus will be on new subscribers, with guidance from Netflix expecting 8.5 million new subscribers which seems achievable based on downloads and a solid slate of content over the quarter including the political satire “Don’t Look Up” as well as “Squid Game” “the Maid” and returning shows “You,” “Money Heist,” “Emily in Paris,” “The Witcher” and “Cobra Kai”. It is also worth noting that the fourth quarter typically sees the highest number of new subscribers having previously added 8.76 million users additions in 4Q19 and 8.51 million in 4Q20. Credit Suisse analysts also estimate a subscriber base to reach 8.5 million new subscribers in the fourth quarter, higher than the estimate shared by JP Morgan Chase bank’s analysts last week, of subscribers to hit 6.25 million and lowered their price target to $725 from $750.

Based on average analysts estimates, adjusted earnings per share is forecast to decrease to $0.89, a decline of –49% from a year earlier as the company accelerate the production of content. Meanwhile, revenue is expected to rise +16.1% from a year earlier to 7.716 billion and up +3.1% over the quarter. Of the analysts which cover the stock, 73% have a buy recommendation with an average twelve-month price target of $761.5 implying a potential 29% upside from current levels.

The performance of the stock over the past five years has rallied from sub $150 a share in late 2017, to reach an all-time high of $700.99 in November 2021. More recently, prices have sold off around 25% over the past six weeks, to be currently around the $520 level.