Video streaming service Netflix (NASDAQ:NFLX) is expected to report its Q4 2015 earnings next week (January 19), following the company’s announcement on CES that it plans to expand globally to more than 130 new countries. The announcement triggered a 9% surge in Netflix stock price, reflecting investors’ desire to see Netflix grow rapidly worldwide after the recent expansions into Australia, New Zealand, Japan, and more European countries helped the company maintain its impressive growth rate. This latest Netflix stock price surge was followed by a quick and sharp drop in the stock price partially related to the overall weakness in the stock market and partly related to ITG Research lowering estimations for local subscribers figures, driving domestic revenue slightly lower.
Netflix’s Q4 2015 earnings release will conclude an incredible year for Netflix in which it reached new revenue records and yielded an extraordinary return for its shareholders. The company generated record levels of quarterly revenues and is expected to end 2015 with an impressive 17% YoY increase in top line figure to an all-time high of $6.4 billion annual revenues.
In 2015, market participants grouped Netflix together with Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), and Alphabet Inc-C (NASDAQ:GOOG) in the group of four named FANG that led the S&P 500 annual stock performance. Netflix was the best-performing stock of the FANG group and the best-performing stock of the S&P 500 in 2015 with an astonishing 134% return.
Source: Netflix Stock Price Data by amigobulls.com
Netflix’s successful 2015 has raised investors’ expectations that the company will continue to grow revenues at least at the same pace as it did in previous years. As shown in the chart below, since 2013 Netflix generated higher revenues each quarter and its five year revenue CAGR stood at 17%. The consensus of analysts estimates is that Netflix will not only continue to grow in 2016 but will increase grow by more than 35% YoY.
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