Netflix’s boom in value to get test in earnings

Netflix will get a chance next week to validate the $46 billion added to its market value since the company’s blowout earnings report in April.

The main question hanging over Netflix’s second-quarter results — much like the first — is whether the company can add enough streaming subscribers to satisfy investors, whose bullish bets have made the stock the second-best performer in the S&P 500 Index this year. Netflix silenced critics in the first quarter, adding almost 1 million more subscribers than analysts projected. But analysts have made that task more difficult in recent months by raising subscriber estimates, even as some question the stock’s valuation.

“It’s possible expectations have gotten ahead of themselves,” Macquarie analyst Tim Nollen said in a research note ahead of the results. “It may take a solid beat to keep the stock momentum going.”

Nollen has the equivalent of a buy rating on the stock and said he’s not going against Netflix, even though “expectations are sky-high” heading into Monday afternoon’s report.

Growth is critical for the televisionand movie-streaming company, whose success in adding subscribers has fueled a surge in market value that now exceeds Walt Disney Co. by almost $19 billion.

Wall Street is looking for second-quarter total subscriber net additions of 1.22 million in the U.S. and 5.08 million internationally. That compares with Netflix’s forecast of 1.2 million domestically and 5 million globally on April 16.