Tiger Securities: epidemic Naifei, which is favored by the public, will reappear the Q2 curse?

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 Tiger Securities: epidemic Naifei, which is favored by the public, will reappear the Q2 curse?


From the perspective of the core index, the performance of 10.09 million households significantly exceeded the 8.5 million expected by Wall Street. Although it was lower than the 15.77 million in the first quarter, the data of 10.09 million was almost the best in the second quarter.

The strong number of new users boosted the revenue of Netflix in the second quarter to $6.148 billion, up 24.9% from 4.923 billion in the same period of last year, higher than the previous quarters $5.768 billion, and exceeding the markets expected $6.08 billion.

Although the net profit of 720 million yuan in the second quarter was lower than the market expectation, it increased by 166% compared with last years 271 million US dollars. It is reasonable to say that after such a good financial report, Netflix should rise sharply after the financial report. However, the trend after the financial report is not normal. On the contrary, there is a small decline after the financial report. This is mainly because the management of Netflix started to tell the story of the wolf is coming. They think that the growth of users promoted by the epidemic is unsustainable, and even overdraft the demand in the second half of the year. Therefore, they think that the new payment of Q3 will be made Only 2.5 million users.

How about nefis third quarter results?

After talking about the review of last quarters financial report and returning to the main topic, lets talk about the expectation of the third quarters financial report today. According to data from the company, analysts predicted that Netflixs revenue in the third quarter was $6.383 billion, with an adjusted EPS of 2.203.

From the perspective of user growth rate, the financial report of Netflix in this quarter is probably good. As the revenue of Netflix comes from subscribers, that is to say, in the case of no price adjustment, the revenue and net profit performance of Netflix in this quarter are also worth looking forward to. Why do you say that?

Netflix controls earnings forecast

In the second quarter, Netflix gave a very poor Q3 financial report guidance. In terms of revenue, the management expected to reach US $6.327 billion, a year-on-year increase of 20.6%, slightly lower than the market expected of $6.39 billion; in terms of the number of newly paid accounts in the core index, the management predicted that the net increase in the third quarter was only 2.5 million, which was significantly lower than the market expectation of 5.27 million. In the second quarter report, only the United States The number of newly paid households in China and Canada was as high as 2.94 million. It should be said that based on such poor financial guidance, Netflix will probably exceed expectations.

Netflix remains competitive

The reason why Netflixs financial report exceeded expectations is closely related to its high-quality content, in addition to its low guidance. As we all know, for Netflix, quality content is good for attracting users to subscribe. The following chart is based on data from reelgood users from April 1 to June 30, 2020. Of the 20 most watched TV programs, 11 were watched on Netflix, and 8 of them were original programs.

Naifei disease is favored

The novel coronavirus can also be called the epidemic concept unit. With the outbreak of the new coronavirus in the world, the downloading of nfei has also been increasing rapidly. Although the epidemic has eased in the past few quarters, there has been a sharp rise in the number of new cases in the United States in the past month as winter approaches. According to the Washington Post, the average daily number of new cases in a single week in 20 states of the United States hit a new high on October 10, and more than half of them broke the record again on October 13.

In view of the impact of the epidemic, a group of Wall Street analysts recently upgraded the Netflix rating and target price.

Cowen, the investment bank, rated the stock as a buy, and the 12-month target price was raised from $550 a share to $625. Cowen told customers that the number of new users expected to be higher than the previous performance outlook due to the impact of the new crown outbreak. Netflier is one of the main beneficiaries of the new crown outbreak, and the companys share price has risen by more than 70 per cent in 2020. With the nationwide blockade imposed by the United States, Americans are forced to stay at home, sports have been cancelled, and millions of them have registered for netflier.

Goldman Sachs raised the target price of Netflix from $600 to $670 per share. It is expected that the performance of Netflix in the third quarter will be much higher than the guidance and general expectation. Driven by the growth of platform content, lack of competition in entertainment time and consumption, and more time for Americans to stay at home, Goldman Sachs expects to add about 6 million users to Netflix.

JP Morgan raised the target price of Netflix to 625. JP Morgan believes that driven by strong content in September, Download volume and dau show growth trend, JP Morgan expects the number of new users in the third quarter will increase from 3.1 million to 5.1 million (the previous guideline was 2.5 million).

Since the financial report is so good, can we copy the bottom? I dont recommend you to do so. From the historical data, the rise and fall after the financial report of Netflix has little to do with the financial report expectation. For example, the financial reports of the first quarter and the second quarter before the financial report were greatly higher than expected. However, in the telephone conference after the financial report, the management lowered the guidance for the next quarter, leading to the stock price not rising but falling instead, and the risk of bottom copy before the financial report is still very high.

For option trading, the risk is not small, and the option price is composed of intrinsic value and time value. Throughout the performance of Netflix after the first two financial reports, the stock price volatility is small. Even if you buy the right direction, because the intrinsic value of the option contract does not rise, the time value loss, and the implied volatility drops, eventually leading to the double kill situation of options, the risk of buying unilateral options to bet on nefcs financial report is not low.

What do you think of nefis financial report this time? Are you going to bet on the results? This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you. Source: editor in charge of mass news: Chen Tiqiang_ NB6485

What do you think of nefis financial report this time? Are you going to bet on the results?

This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you.