Netflix faces low investor interest, subscriber challenges with upcoming report
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With Netflix (NASDAQ:NFLX) set to deliver its fourth-quarter results next week, attention is beginning to focus on whether a big slate of new content translated into a strong number of new subscribers for the streaming TV giant over the last three months of 2021.

Needless to say, analysts that cover Netflix (NFLX) have begun to give their two cents about what the company might say, and how Wall Street might react, when Netflix (NFLX) reports its results on Jan. 20. On Thursday, Douglas Mitchelson, of Credit Suisse, joined that chorus saying, among other things, that "investor interest is as low as we have seen the past eight years" leading up to the company's fourth-quarter results.
"Sentiment regarding [fourth quarter and first quarter] net [subscriber] adds has faded with some negative previews," Mitchelson said, in a research note. "With the [fourth quarter] record content slate, [the] results are a watershed moment for the Netflix thesis."
Mitchelson, who has an outperform rating and $740-a-share price target on Netflix's (NFLX) stock, said that the "broad perception" of the streaming video on demand [SVOD] market is that while there is room for a company as big as Netflix (NFLX), there are new challenges emerging that could weigh on how investors view Netflix (NFLX) shares down the road.
"[The] low-hanging fruit has been picked, competition is coming, the streaming wars will drive up content costs, and valuation is not yet appealing for non-growth investors," Mitchelson said.
According to Google (NASDAQ:GOOG) search data, Netflix's (NFLX) popular releases during the fourth quarter included the dark comedy-drama Maid, season two of Emily in Paris, and the Leonardo DiCaprio-Jennifer Lawrence satire Don't Look Up. However, Mitchelson said Netflix (NFLX) released "nothing as 'viral'" as the movie Bird Box, or the series Bridgerton or, most notably, Squid Game, and that Nielsen (NYSE:NLSN) streaming information showed "no notable inflection" in the company gaining major market share in the just-completed quarter.
Mitchelson left unchanged his estimates that Netflix (NFLX) will add 8.5 million new subscribers in the fourth quarter of 2021, and 25 million for all of 2022. Mitchelson's fourth-quarter subscriber estimates are in line with Netflix's (NFLX) own forecasts.
Netflix (NFLX) shares slipped by 1.5% on Thursday. Last week, the company's stock took a hit after J.P. Morgan analyst Doug Anmuth said he expects Netflix (NFLX) to report 6.25 million new subscriber additions for its fourth quarter, and cut his price target on the company's stock to $725 a share from $750.