Subscriber numbers are a barometer for Netflix's return on investment in original content in the face of growing competition from the likes of Amazon, which has been ramping up investment in original programming, as well as new services such as HBO Now.
Overseas, where Netflix is rolling out with a view to being accessible worldwide by the end of next year, subscriber stats tell investors how effectively the company's marketing is faring in new countries. And that success, or lack thereof, can help project what to expect from big launches, such as new Netflix operations in Spain and Italy this fall.
Analysts are looking for $1.65 billion in revenue, and earnings per share of 28 cents, two pennies more than the company's earnings guidance, according to StreetAccount.
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The bull case: Morgan Stanley raised its estimates and price target for Netflix shares to $750, with a new bull case of $940, driven by higher pricing. Netflix is due for a 7-1 stock split Wednesday to address the stock's growth by 10 times since the start of 2012.
Analyst Ben Swinburne points to the fact that Netflix is seeing higher time spent per day on the service than any single broadband network. He says his outlook for Netflix monthly subscription pricing to reach $14 by 2025 is potentially still conservative. Old subscribers are grandfathered in at $8 per month.
The bear case: Netflix's earnings come on the heels of harsh criticism from hedge fund manager David Einhorn. Einhorn said that the streaming service's hit show, "House of Cards," was "scripted to compete with Ambien" and derided the stock's performance, saying "accountability is in the distant future." Meanwhile, Bespoke Investment Group points to the track record of Netflix's stock dropping in July following its second quarter earnings release.