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Unpacking Q3 Earnings: Netflix (NASDAQ:NFLX) In The Context Of Other Consumer Subscription Stocks

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Unpacking Q3 Earnings: Netflix (NASDAQ:NFLX) In The Context Of Other Consumer Subscription Stocks

Looking back on consumer subscription stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Netflix (NASDAQ:NFLX) and its peers.

Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.

The 8 consumer subscription stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 2.2% below.

In light of this news, share prices of the companies have held steady as they are up 3.5% on average since the latest earnings results.

Netflix (NASDAQ:NFLX)

Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.

Netflix reported revenues of $9.82 billion, up 15% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Netflix Total Revenue
Netflix Total Revenue

Interestingly, the stock is up 36.3% since reporting and currently trades at $936.91.

We think Netflix is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q3: Duolingo (NASDAQ:DUOL)

Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.

Duolingo reported revenues of $192.6 million, up 39.9% year on year, outperforming analysts’ expectations by 1.8%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.

Duolingo Total Revenue
Duolingo Total Revenue

Duolingo pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 113.1 million users, up 36.1% year on year. The market seems happy with the results as the stock is up 6.6% since reporting. It currently trades at $340.

Is now the time to buy Duolingo? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Chegg (NYSE:CHGG)

Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.


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