Netflix shares: subscriber data in focus for Q1 as Russia ban enforced

(Video Transcription)

Netflix Q1 earnings preview

First quarter (Q1) earnings season is in full swing and it's going to be the turn of Netflix next week. They'll be reporting on Tuesday.

We are expecting earnings per share (EPS) to come in at $2.95 with revenues coming in at $7.94 billion. The streamer did suspend operations in Russia at the beginning of March amid the invasion of Ukraine and it's largely expected they are going to take a hit from the ongoing geopolitical crisis.

Netflix technical analysis

Let's bring up a chart of Netflix to see how the share is performing, because we have seen Netflix drop a big amount since the beginning of the year.

Remember, back in January, we saw that fourth quarter report. They were saying that they had weak subscriber growth guidance for the next few months and shares plummeting there, as you can see, really dropping here in mid-January, heading towards those lows that we saw back here on the 15th of March.

A lot of analysts are going to be looking for that subscriber growth figure, especially because it's estimated that around one million subscribers could have dropped out from Russia because of the aforementioned ban.

Also, heading into the next few quarters, what's that subscriber growth looking like? Are they going to be able to keep up to those demands?

Looking at the share price here, as you can see, we have seen a recent pullback starting here at the beginning of April coming into that selloff that we've already seen back here, from those highs in November. The selloff does look a little bit extended.

Let's zoom out a little bit here so we can see further out. To me, it seems a little overextended, but we are back at those levels that we saw prior to the pandemic-induced rally. So this potentially means that buyers, or new buyers, are going to be more comfortable coming into the market. So we are looking for those key levels.

$332, that's an area where, in the past, we've seen quite a bit of support, as you can see. This is back here in April 2019, before we saw that dip there at the end of 2019, coming into that move towards those highs there back in 2020.

So, all-in-all it does look like Netflix might be off to a bit of a rough start in the first quarter of the year. It's a question of how much that's already priced in given these expectations of subscriber losses in Russia. Is this where this pullback has come? Are we expecting Netflix to potentially pick up a bit more buying momentum if we do see new buyers coming into the market?