This coming week, earnings reporting season kicks into high gear. Thus, two of 2020’s hottest companies will try and keep their momentum alive.
One of the biggest beneficiaries of the COVID-19 crisis is Netflix Inc. It is because, during quarantine measures, more people flocked to streaming services. Moreover, there was a dearth of traditional new TV programming in the first half of the year. The question is if that easy growth is in the past.
In the first six months of 2020, around 27 million new paying subscribers appeared on Netflix. The company warned investors to brace for a slowdown. For the third quarter, analysts forecast only 3.8 million new paid subscribers when Netflix reports results Tuesday afternoon. In more than a year, that would mark its lowest quarterly pickup.
However, there is more to Netflix than subscriber growth. Some analysts are feeling upbeat concerning other parts of the company’s story. According to Morgan Stanley’s Benjamin Swinburne, the streaming giant seemed less impacted than other media companies by pandemic-induced production halts. Both Benjamin Swinburne and Alex Giaimo, Jefferies analyst, are encouraged because of Canada’s recent price hike. Thus, it suggests a strong engagement with the Netflix platform and can signal a future price hike in the United States.
Nevertheless, the COVID-19 pandemic has not been quite as kind to Tesla Inc. Coronavirus forced Tesla to shutdown factories earlier this year. Nonetheless, you would not know that by looking at its stock. The stock rocketed more than four hundred percent higher so far in 2020. Tesla is unable to meet its previously stated sales target of 500,000 vehicles throughout 2020. Investors can blame this on the pandemic’s shortfall. Moreover, they can give the company a pass, per CFRA’s Nelson Garrett.
There is a crucial issue for Tesla’s Wednesday afternoon earnings call. The issue is how the company’s demand is holding up. In the third quarter, Tesla delivered 124,100 Model 3 and Y vehicles combined. Nevertheless, it could make at least 150,000. This is according to Bernstein analyst Toni Sacconaghi. He wrote that the utilization rate was less than what they had seen in prior quarters, begging whether production or demand was the constraint.
Tesla and Netflix highlight the busiest earnings reporting slate so far this quarter. This week will come out reports on eight Dow Jones Industrial Average and 84 S&P 500 components.
That is the news concerning Netflix and Tesla. Let us wait and see the reports which will come this week.
- Trading Instrument