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Netflix Q1 earnings preview: this quarter could be really messy

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Netflix Inc (NASDAQ: NFLX) is set to report its Q1 results on Tuesday, after the bell. Ahead of the earnings report, a Jefferies analyst warns it could be another disappointing quarter for the streaming giant.

Uerkwitz’ remarks on CNBC’s ‘Squawk Box’

Andrew Uerkwitz sees several headwinds that could weigh on Netflix’s subscriber growth in the fiscal first quarter. Speaking with CNBC’s Joe Kernen on “Squawk Box”, he said:

You have the price increase in North America that typically follows slower subscriber growth and higher churn. You have Russia and the broader impact to Europe. So, subscriber number for this quarter and guide for the next quarter could be really messy.

Uerkwitz, however, remains positive on Netflix Inc for the long term. Earlier in April, Bryn Mawr Trust’s Jeff Mills also said NFLX was a great buy at the significantly trimmed valuation.

Netflix should cut back on content spend

According to the Jefferies’ analyst, it could be a while before Netflix hits its target of 500 million global subscribers. He also sees the need for the media company to cut back on content spend. Uerkwitz said:

Netflix is at the top of the food chain as far as subscription models go. And people won’t unsubscribe if the content doesn’t improve. So, we think they should slow down content spend. With so much choice, it’s not clear how important content is anymore.

Netflix has reported weaker-than-expected subscriber growth in six out of its previous seven quarters. The stock is still down nearly 50% from its high in early November 2021.

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