Netflix earnings preview: What analysts are looking for

The last six months haven't been kind to Netflix, whose stock has lost nearly 25 percent. As the company prepares to release its fourth quarter results, analysts point to one particular albatross weighing on its shares: user growth.

With slowing domestic growth, Netflix has been under pressure to expand its international user base by as much as 25 percent over last year. Investors are also hoping the company will announce more markets amid reports of expansion plans in Asia.

However, it's not just fourth user numbers in focus: it's the company's projections for this year, as well as its outlook on margins, and growing content costs.

When Netflix reports after the bell Tuesday, investors can certainly expect volatility—the stock has skyrocketed or plummeted by an average of 14 percent following earnings releases. The company's shares dropped 25 percent last quarter despite strong top and bottom line growth.

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There is one number to watch: 57 million. That's how many total members Netflix projected it would have at the end of the fourth quarter. Still, Wall Street analysts are expecting slightly larger numbers. Netflix watchers are projecting total net additions of 1.83 million streaming subscribers in the U.S. and 2.17 million overseas, according to StreetAccount.

In the first quarter of the year subscriber growth is projected to accelerate, with the addition of 1.96 million US streaming subscribers and 1.86 million overseas. Wall Street analysts are expecting revenue to grow 26 percent to $1.485 billion, while earnings per share are expected to decline from 79 cents in the year-ago quarter to 45 cents, according to Thomson.

Also, watch margins. The company projected in its last quarterly report that it would hit 30 percent contribution margin in the first half of this year, with plans to grow margins an average of 200 basis points per year afterward.

Netflix earnings come on the heels of stiffening competition, as other streaming media companies pull out the big guns to pull in loyal customers. Recently, Amazon won 2 Golden Globes, signed a deal with Woody Allen, and launched a new pilot series with 13 shows, including big name producers Ridley Scott and X-Files producer Frank Spotnitz. As Barry Diller pointed out, Amazon can afford to lose money on original content, when it's just using those shows to lock people into free shipping so they buy more stuff.

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Since Amazon is willing to lose money while spending it on the content business, that may put Netflix at a competitive disadvantage. Amazon isn't Netflix's only competition—HBO is readying to launch a stand-alone over-the-top (OTT) content application as well.

In Netflix's quarterly letter to shareholders, CEO Reed Hastings always addresses the competition, hot-button issues such as Net Neutrality, and content costs. This time around, he may address how international expansion is going so far, and what kind of pace investors can expect in the coming quarters.