Wall Street is expecting a huge quarter from Netflix, even as US growth slows

Einhorn: Short Netflix

Netflix stock shot up 27 percent over the last year, and Wall Street is expecting a huge quarter from the company.

The streaming giant reports earnings after the bell Wednesday. Analysts are expecting $2.47 billion in revenue, a 35 percent year-over-year increase, and earnings per share of 13 cents, according to a Thomson Reuters consensus estimate.

But going forward, domestic will likely slow significantly, analysts say.

The company likely is maxing out on how much it can grow in the United States — eMarketer projects that individual users will grow 6.6 percent in 2017, and then slow to 3.6 percent the year after that. So Netflix bulls are looking for opportunities outside the U.S.

"We believe there is material room for international subscriber growth and contribution profit growth, even without material gains in Asian markets," Mizuho analyst Neil Doshi wrote in a note to clients, moving the stock to a buy position from neutral. "Furthermore, we like the moats around original content, and as cord-cutting increases, we see NFLX as a beneficiary. We like the setup for 2017 and beyond."

While most analysts are still positive on the company, a major concern for some analysts going forward is how much Netflix is spending to create original content. Netflix previously announced plans to spend $6 billion on new content this year, equaling over 1,000 hours of original content (compared to 600 hours in 2016), some of which will be to entice overseas viewers.

In December, for example, Netflix signed a deal with Bollywood star Shah Rukh Khan's production house Red Chillies Entertainment. Earlier, it announced it was giving Indian comedian Vir Das his own special, and greenlit "Sacred Games," based on the Indian crime novel of the same name.

While the company has proven to investors that adding high quality shows to a library of existing content can draw in consumers, it will need to show more profitability in the future, Forrester analyst Jim Nail told CNBC. That day is coming, he added.

"They are very close to that day when the focus shifts from the revenue or subscriber growth to [more] profitability," Nail said.

Options Action: Trouble ahead for Netflix?