Why Netflix Will Have a Good Earnings Report This Week
TheStreet
Netflix (NFLX) - Get Report is set to have an impressive quarter on Tuesday, which would be a reversal from July's earnings and guidance disappointment. "For earnings, the bar is set a little lower than it was in July," Eric Jhonsa, columnist for TheStreet said at Jim Cramer's teach-in event on Saturday. He added "That makes things a little easier."
"The fact that expectations are lower should help them out," Jhonsa said.
Whether or not FAANG stocks (Facebook (FB) - Get Report , Apple (AAPL) - Get Report , Amazon (AMZN) - Get Report , Netflix, Google (GOOGL) - Get Report ) have "overstayed their welcome," meaning that their high earnings multiples might be too high now, Netflix could still very much remain a growth stock.
Not only could Netflix be a good pre-earnings play, it could be positioned to maintain its competitive edge in streaming. "The fact that Amazon relies on Prime makes it hard for them to match Netflix dollar for dollar," Jhonsa said. That was in response to Cramer's question asking about the threat to Netflix that Amazon could outspend it because it has a much larger balance sheet.
Jhonsa pointed out "The rest of Netflix's management team is solely focused on streaming," and that "Amazon is focused on so many different things."
Meanwhile, aside from Netflix, Jim Cramer says "Amazon has never been cheap."
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