Shares of Netflix dipped slightly Jan. 6 after two Wall Street analysts suggested the streaming behemoth could miss its fourth-quarter (ended Dec. 31, 2021) subscriber growth projection.
In a Jan. 6 note, J.P. Morgan analyst Doug Anmuth estimated the streamer will have added 6.25 million net new subs globally in the quarter when it reports financial results on Jan. 20. Netflix is projecting 8.5 million new subs added — a number that exceeds most of its competitors.
With the streaming pioneer firing on all cylinders, there are few metrics to critique the service on except subscriber growth — an easy target as the subscription VOD market reaches saturation in the United States.
WarnerMedia contends its HBO Max streaming platform was the top-growing service in 2021, ending the year with more than 73 million combined HBO and Max subs since launching in May 2020.
The tally still trails Netflix’s market-leading global sub count of 213.5 million at the end of Q3 (Sept. 30, 2021), followed by Amazon Prime Video with 175 million, and Disney+ with 118 million.
“We believe fourth-quarter [subscriber] additions were lumpy as Netflix started the quarter with significant spike and buzz around ‘Squid Game,’ which was released in late September,” Anmuth wrote. “Download growth then slowed and ultimately declined into early December before picking up.”
Stifel analyst Scott Devitt also has sub growth concerns, compounded by what he claims were weaker Netflix app engagements in November and ongoing service price cuts in India — a market rival Disney+ dominates after acquiring local streaming service Hotstar in the 20th Century Fox acquisition.
Both analysts maintain buy ratings on the Netflix stock, while each trimmed the stock’s price targets, respectively. Indeed, Devitt reduced his sub growth projection from 10.1 million to 8.6 million — which exceeds Netflix’s estimate.
“Despite these concerns we believe the company executed well on its strategy [in the fourth quarter] releasing a slew of high-profile original content and making solid headway on its video games and visual effects initiatives,” Devitt wrote in a note.