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The Lake Resources NL (ASX: LKE) share price is soaring 13.93% today and is now trading at $2.29, having earlier hit an intraday high of $2.36.

Lithium carbonate prices have eased thanks to heightened production in China year-over-year and month-over-month in March, Trading Economics reports, but are still well up for the year.

“[C]arbonate prices surged 74% year-to-date, as rising energy prices strengthened the appeal to transition away from fossil fuels, adding to the booming demand for electric vehicles,” it says.

“After rising 157% to 3.2 million units in 2021, electric vehicle sales in China are expected to cross five million in 2022,” it adds.

With electric vehicles at the forefront of the lithium push, it doesn’t seem as if demand for the battery metal is set to slow either – even if prices recently fell.

Why is Lake Resources share price rising then?

While lithium prices recently crossed downward for the first time in over 12 months, the Lake Resources share price has been heading the other way.

It’s gained 141% in little over a month and is now up 127% this year to date. The most recent growth catalyst is Lake’s signing of an offtake agreement of up to 25,000 tonnes per annum (tpa) of lithium carbonate from the Kachi project in Argentina.

With that and other agreements in place, Lake hopes to achieve a production capacity of 100,000 tonnes of lithium by the year 2030.

Analyst Stuart Howe at Bell Potter was immediately impressed by the latest move and urged clients to buy on a speculative rating.

BP values the company at $2.83 apiece, noting that Lake has “strategic appeal” in a recent note to clients. The broker is joined by seven other analysts – 100% of coverage – advocating to buy right now, per Bloomberg data.

The consensus price target from this list is $2.47 apiece, offering a potential 8% upside if the analysts are correct.

In the last 12 months, the Lake Resources share price has spiked more than 600% and is now up 48% in the past month of trade, despite lithium prices easing off.

The post Lake Resources share price spikes 14% as lithium prices begin to ease appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 top ASX lithium stocks to buy now
• 3 ASX lithium shares that rocketed between 10% and 24% today
• The Lake Resources share price has surged 56% in a month. What’s happening?
• Why is the Lake Resources share price powering down by 8% today?
• Lithium watch: Broker tips Lake Resources share price to rocket 42% higher

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Citi, its analysts have retained their buy rating and $16.00 price target on this lithium miner’s shares. This follows the release of Allkem’s third quarter update, which was a touch softer than it expected. Nevertheless, with lithium prices expected to jump again during the fourth quarter, Citi remains very positive on Allkem’s outlook. The Allkem share price is trading at $13.51 today.

Bank of Queensland Limited (ASX: BOQ)

A note out of Morgans reveals that its analysts have retained their add rating and $11.00 price target on this regional bank’s shares. This follows the release of the bank’s first half results, which came in ahead of expectations thanks to one-offs. Looking ahead, the broker is positive on Bank of Queensland’s future and is expecting stronger returns on equity as cost efficiencies and synergies are realised from the ME Bank acquisition. The Bank of Queensland share price is fetching $7.95 on Tuesday afternoon.

TechnologyOne Ltd (ASX: TNE)

Analysts at Goldman Sachs have initiated coverage on this enterprise software company’s shares with a buy rating and $13.90 price target. Goldman expects TechnologyOne to meet its +A$500 million FY 2026 ARR target and even believes that the risks are skewed to the upside. It also expects the company to deliver on its target of expanding profit margins. It notes that both of these are not factored into consensus or market expectations. The TechnologyOne share price is trading at $11.00 today.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 top ASX lithium stocks to buy now
• Broker says Bank of Queensland share price is great value
• 5 things to watch on the ASX 200 on Tuesday
• Top brokers name 3 ASX shares to buy next week
• Are these 2 ASX tech shares buys in April?

Motley Fool contributor James Mickleboro owns Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Betmakers Technology Group Ltd (ASX: BET) share price is launching higher on Tuesday despite the company’s silence.

In fact, the market hasn’t heard word from the betting technology developer and distributor since February.

Still, the Betmakers share price is up 5.88% at the time of writing, trading at 63 cents.

Though, at its intraday high of 64.5 cents, the stock was boasting an 8.4% gain.

For context, the broader market is also up in the green today, though, not to the same extent.

Right now, the All Ordinaries Index (ASX: XAO) is up 0.6% while the S&P/ASX 200 Index (ASX: XJO) has gained 0.58%.

Let’s take a closer look at how Betmakers, and its peers, are performing on Tuesday.

What’s driving the BetMakers share price today?

The Betmakers share price is taking off on Tuesday, while many of its consumer discretionary peers struggle.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is currently underperforming the broader market, gaining just 0.14%.

However, the betting technology company’s gain might be a continuation of last week’s rebound.

Over the first 12 days of April, Betmakers’ stock slumped 12.5%. Though, it managed to regain 7.1% over the course of Wednesday and Thursday last week. It’s still 3% lower than it was this time last month.

Additionally, Betmakers’ short position has improved ever so slightly. According to the latest data from ASIC, 12.5% of its shares were in the hands of short-sellers last week. That’s down from 12.6% on 7 April.

The post The Betmakers share price is surging 6% on Tuesday. Could this be why? appeared first on The Motley Fool Australia.

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• Why is the Betmakers (ASX:BET) share price having such a lousy week?
• These are the 10 most shorted ASX shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The A2 Milk Company Ltd (ASX: A2M) share price has had a difficult period during COVID-19. But could there still be hope for the company over the rest of the year?

Since the start of July 2020, the A2 Milk share price has fallen by around 75%. In the 2022 calendar year, A2 Milk shares have fallen around 16%.

Could the under-pressure business actually be an opportunity?

Some broker opinions are not optimistic about the business in the short term, but the price targets suggest upside.

Are negatives building for the A2 Milk share price?

One of the most recent notes on A2 Milk came from Credit Suisse. It’s currently neutral on the company, however, it reduced its price target from $5.75 to $5.15. This implies a potential rise of around 10%.

There are a few factors affecting the broker’s opinion of the business. The number of babies born in China is expected to fall this year, meaning this could lead to lower demand for A2 Milk’s products because there are less mouths to feed. Credit Suisse has reduced its expectations of profit.

Lockdowns in China are also expected to hurt short-term online revenue in the country. For example, Shanghai, one of the biggest cities in the country, has been in lockdown for weeks. The lockdowns are reportedly impacting various parts of the country.

However, the A2 Milk share price could benefit with Credit Suisse expecting the company to continue growing its market share in the country over the next couple of years.

Credit Suisse puts the A2 Milk share price at 33x FY22’s estimated earnings and 29x FY23’s estimated earnings.

Other ratings

There are, of course, other ratings on A2 Milk and some of the negative ones now have price targets that imply a notable gain for the company.

For example, the brokers at Macquarie rated the A2 Milk share price as ‘underperform’. However, the price target of $5.60 offers a potential upside of around 20%. It noted the growing market share for the company.

Citi currently rates the company as a sell. The price target is $4.80 because of the impacts of COVID-19 on China.

Morgans rates the business as a hold but has an A2 Milk share price target of $6.39. That suggests a possible rise of almost 40% over the next year. The broker thinks that the leadership has done well to stop the decline.

A2 Milk outlook

A2 Milk gave its thoughts about the short term when it released its FY22 half-year result.

It said that the revenue growth outlook for FY22 had improved, with FY22 second-half revenue expected to be “significantly higher” than the second half of FY21 and higher than the first half of FY22, thanks to growth in Chinese label and English label infant formula.

However, improvement in revenue is not expected to translate into higher earnings this year as it planned to increase investment for growth.

The post Is there still hope for the A2 Milk share price in 2022? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Why is the A2 Milk share price outperforming today?
• 3 ASX 200 shares sliding to 52-week lows on Tuesday
• Why A2 Milk, G8 Education, Nearmap, and Zip shares are dropping
• Why A2 Milk, Ionic Rare Earths, Pilbara Minerals, and Tyro shares are dropping

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) is slated to report its first-quarter 2022 results after the market close on Thursday, April 28. An analyst conference call is scheduled for the same day at 5:30 p.m. ET. 

The e-commerce and technology behemoth is heading into its report on a mixed note. Last quarter, its earnings crushed the Wall Street consensus estimate, while its revenue was in line with expectations. However, in the prior quarter (the third quarter of 2021), Amazon missed the consensus estimate for both the top and bottom lines, with the profit miss quite large. And in the quarter before that one, the company also fell short of the Street’s revenue expectation. 

In 2022, Amazon stock is performing roughly in line with the broader market. It’s down 9% through April 14 (April 15 was a market holiday), while the S&P 500 and Nasdaq Composite indexes (including dividends) are underwater by 7.5% and 14.5%, respectively. 

Here’s what to watch in Amazon’s upcoming report. 

Amazon’s key numbers

Metric	Q1 2021 Result	Amazon’s Q1 2022 Guidance	Amazon’s Projected Change	Wall Street’s Q1 2022 Consensus Estimate	Wall Street’s Projected Change
Revenue	$108.5 billion	$112 billion to $117 billion	Approximately 3% to 8%	$116.3 billion	7.2%
Adjusted earnings per share (EPS)	$15.79	N/A	N/A	$8.48	(46%)

Data sources: Amazon.com and Yahoo! Finance. Note: Amazon does not provide earnings guidance.

While Amazon doesn’t provide guidance for earnings, it does so for operating income. Management expects first-quarter operating income to range from $3 billion to $6 billion, which represents a decline of 66% to 48% from the year-ago period. 

For context, last quarter — the big holiday quarter — Amazon’s revenue increased 9% year over year to $137.4 billion. That result was on target with the $137.4 billion Wall Street had expected and near the high end of the company’s guidance range of $130 billion to $140 billion. By segment, sales in North America and Amazon Web Services rose 9% and 40%, respectively, while those in international edged down 1%.

Last quarter’s net income was $14.3 billion, or $27.75 per share, up 97% year over year. This result demolished the analyst consensus estimate of $3.58 per share. But that’s because the bottom line got a big boost from a pre-tax valuation gain of $11.8 billion from Amazon’s common stock investment in electric vehicle maker Rivian Automotive, which held its initial public offering (IPO) in November.

Supply chain issues

Like other companies that import product, Amazon has been dealing with pandemic-driven global supply chain issues, which have increased costs. Its costs have also risen because of higher employee wages stemming at least in part from a tight labor market.

The company has been doing a good job controlling the impact on its results of these macroeconomic issues. Moreover, on last quarter’s earnings call, CFO Brian Olsavsky said management expected supply chain issues to have less of an impact on first-quarter results relative to recent results. 

Second-quarter 2022 guidance 

The market looks forward, so its reaction to Amazon’s upcoming report will probably hinge at least as much on second-quarter guidance as on first-quarter results. 

The company provides guidance for revenue, but not earnings. However, its outlook for operating income often gives investors a general idea as to what year-over-year percentage change the company expects on the bottom line.

For Q2, Wall Street is currently modeling for Amazon’s revenue to increase 12% year over year to $126.4 billion and adjusted EPS to decline 26% to $11.22.

Investors should note that last year Amazon’s annual Prime Day was held in Q2 (June). The company hasn’t yet announced the date for this year’s event. This is a big event so presumably has more than a negligible impact (which the company doesn’t quantify) on results. In other words, year-over-year comparisons should be affected if Prime Day isn’t held in the same quarter as last year. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon earnings: What to watch on April 28 appeared first on The Motley Fool Australia.

More reading

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• Shopify, Alphabet, Amazon, and Tesla stocks are splitting — which ones are the best buys?
• Is Amazon stock a buy this month?
• Why Amazon stock slipped on Monday
• Why Amazon stock slumped today

Beth McKenna has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The AGL Energy Limited (ASX: AGL) share price has started this week on a roll, currently 2.08% higher at $8.82.

And while there’s been no word from the company lately, there have been a few recent happenings that could be helping its stock.

The energy producer and retailer’s stock earlier reached an intraday high of $8.83 — the highest it’s been since July 2021.

For context, the S&P/ASX 200 Index (ASX: XJO) is also in the green on Tuesday. It’s currently up 0.57%.

Let’s take a look at all that might be driving AGL’s stock upwards today.

What’s boosting the AGL share price today?

The AGL share price is moving higher on Tuesday, as is its home sector.

Right now, the S&P/ASX 200 Utilities Index (ASX: XUJ) is up 1.33%, with all three of its constituents recording gains.

On top of that, the S&P/ASX 200 Energy Index (ASX: XEJ) has gained 1.32%, making them among the best-performing sectors today.

While the positive momentum among its ASX 200 peers might be driving the AGL share price higher, its gains might also be a delayed reaction to the company’s recently changed short position.

In late March, AGL’s short position was 2.28%, according to Australian Securities and Investments Commission (ASIC) data. Now, it’s sitting at 0.49%.

Previously, around 15 million of the company’s shares were in the hands of short sellers. As of the most recent data available, that number has fallen to approximately 3.3 million.

That means fewer market participants are betting the company’s stock will fall.

Since the regulator broke the news of the notable drop, the AGL share price has surged 15%.

Additionally, today’s gains included, it’s almost 40% higher than it was at the start of 2022.

Though, it has fallen 4.6% since this time last year.

The post Why is the AGL share price having such a stellar start to the week? appeared first on The Motley Fool Australia.

More reading

• AGL share price in the green amid ‘virtual battery’ deal
• What was the highest ever AGL Energy share price?
• Rain or sunshine for ASX renewable shares in the March quarter?
• Could April be a good month for the AGL share price?
• Why AGL, Alliance Aviation, Woodside, and Xero shares are charging higher

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A big criticism of cryptocurrencies such as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) is that a huge amount of energy is required to create and maintain them.

The trouble is, blockchain systems require high levels of computing power to crunch all the numbers. And all that calculation leaves a significant carbon footprint.

According to Coinjar, Ethereum annually uses about 110TWh of electricity, which is the same as the entire nation of the Netherlands.

But a big change is coming that will bring this impact down.

Just get one person to run, not 10

Ethereum currently runs on a proof-of-work protocol. 

Balmoral Asset Management director Angus Crennan last month told The Motley Fool how that is extremely inefficient.

“Imagine 10 people starting a race and running all the way to the end of the race, but only one of them is allowed through the gate. So then the other nine runners have to go back to the start, and all that energy and time is wasted.”

But the great news is that Ethereum is upgrading to a proof-of-stake network — a project known as ETH 2.0 or The Merge.

“What happens there is that there’s a selection process of who’s going to do the reconciliations,” said Crennan.

“What that means is modern cryptocurrencies like Solana (CRYPTO: SOL) use less energy to do a transaction than it does to do a Google search.”

So it will be that Ethereum will dramatically reduce its energy usage once the upgrade takes place.

“One estimate puts Ethereum’s post-Merge energy usage on par with that of a small town,” Coinjar told its customers.

“Add in scaling technologies such as sharding and it’s expected that the network’s energy-per-transaction cost could end up somewhere between 0.1% to 0.4% of Visa Inc (NYSE: V)’s.”

Bitcoin still using enormous energy

This significant reform from the second biggest crypto leaves the question of what Bitcoin can do.

Bitcoin is still running on a proof-of-work network, which is proving to be brutal on the environment.

According to Bankless Times, mining one Bitcoin emits about 191 tonnes of carbon dioxide. This is the same carbon footprint as 1.6 million Visa transactions.

Digging up gold, in fact, uses 3.5 times less power than creating new Bitcoin.

Yikes.

The situation is even worse now than a year ago because of China’s prohibition last year on Bitcoin mining.

Until then, the majority of Bitcoin creation took place in that country, using renewable hydroelectricity resources.

“Early signs suggest that the proportion of renewable energy in the mix may have dropped 30% to 40%.”

According to Coinjar, the Bitcoin network now eats up 0.6% of all the electricity in the entire world.

“As with all energy-intensive industries, the problem won’t be solved until renewable/low-carbon energy abundance is the global norm,” the company told its customers.

“Bitcoin’s trade has always been disruption. Energy may be its next target.”

The post Ethereum uses same energy as the Netherlands. Here’s how it’ll change appeared first on The Motley Fool Australia.

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• Why Bitcoin, Ethereum, Dogecoin, and Shiba Inu dropped today
• Why Bitcoin and Ethereum were rising on Wednesday
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Motley Fool contributor Tony Yoo owns Bitcoin, Ethereum, and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin, Ethereum, Solana, and Visa. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lynas Rare Earths Ltd (ASX: LYC) share price is heading south today despite no new announcements from the company.

At the time of writing, the rare earths producer’s shares are down 4.37% to $8.98.

In context, the S&P/ASX 200 Materials (ASX: XMJ) sector is one of the best performers on the ASX. The index which contains 39 companies that involve mining, forest products and construction materials is up 1.57% to 19,426 points.

What’s driving Lynas shares to the ground lately?

Following the recent fall in Neodymium-Praseodymium (NdPr) prices, it appears investors are seeking to offload Lynas shares on Tuesday.

The company produces NdPr which is a magnetic rare earth alloy used in many modern technologies.

Since the beginning of March, the price of NdPr has been on a trending decline. In fact, in the past month, the commodity has lost more than 20% in value.

Lynas is considered as the world’s second largest producer of NdPr, behind China which accounts for 60% of the global production of rare earths.

These deposits comprise a group of 17 metals that are critical to the manufacturing of many electronic products. This includes mobile smartphones, electric vehicles, aircraft engines, wind turbines, as well as military equipment.

While the NdPr price is cooling off for now, it’s important to remember that Western countries are trying to suppress China’s dominance in the sector.

If political tensions between the West and the Asian giant rise, this could have a profound impact on crucial products.

Lynas is seeking to disrupt China’s supply of rare earths and become a vital company for advanced economies.

However, for this to happen, the company will need to increase production output significantly.

Lynas share price review

Over the past 12 months, the Lynas share price has rocketed close to 40% following positive investor sentiment.

Although, since the start of the year, its shares have recorded wild swings of more than 20% in either direction.

The company’s shares are currently down 12% in 2022.

Lynas has a price-to-earnings (P/E) ratio of 29.28 and commands a market capitalisation of roughly $8.06 billion.

The post What’s going on with the Lynas share price today? appeared first on The Motley Fool Australia.

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• Why Adbri, Eroad, Lynas, and Perpetual shares are tumbling
• Should you buy Iluka or Lynas shares for rare earths exposure?
• Lynas share price lifts amid record quarterly result
• The Lynas share price has rocketed 50% in six months. Can it keep rising?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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While it hasn’t been immune to the big reset in Aussie markets, the cannabis sector has certainly remained buoyant this year.

Whilst most sectors have seen last year’s gains evaporate in 2022 so far, ASX cannabis shares appear to be flowering along nicely, with several names outstripping peers in adjacent markets.

Here are three standouts from the bunch.

Emyria Ltd (ASX: EMD)

Emyria has been busy these past few months – very busy. In February, the biotech advised it had expanded its proprietary MDMA analogue library with the University of Western Australia.

The following month, Emyria announced the launch of its “second highly bioavailable, ultra-pure CBD capsule, EMD-RX7”.

According to the company, “EMD-RX7 demonstrates more than 4 times the bioavailability (a measure of the amount of the drug reaching the bloodstream) compared to the only registered CBD oil – Epidyolex – in a recent pharmacokinetic animal study meaning lower doses may be required for clinical results.”

Last week, it provided more colour on its first ultra-pure CBD medicine, EMD–RX5. It said that patient dosing for a phase one clinical trial was completed and that preparations had been made for phase three pivotal trials as well.

At the time of writing, the Emyria share price is trading up 3.23% on the day at 32 cents. That takes its gains to 60% over the last 12 months.

Cronos Australia Ltd (ASX: CAU)

Shares in Cronos Australia have remained buoyant these past 12 months with a near 118% return. Shares are also up 52% this year to date to now trade at 30 cents.

In recent times, the big move for this cannabis player was its merger with CDA Health Pty Ltd back in December, placing the latter as a wholly-owned subsidiary of Cronos.

CEO Rodney Cocks said the merger will enable Cronos to “take the company to the next level of growth”.

In its most recent earnings release, Cronos printed cash receipts of $28.5 million and was net cash flow positive from operations (CFFO) with $9 million in CFFO for HY FY22.

It also mentioned that “[m]edicinal cannabis unit sales for the first half of FY2022 exceed unit sales for all of FY2021”.

Incannex Healthcare Ltd (ASX: IHL)

Shares in Incannex have also held returns over the last year, although have lost some of those gains in March. After some volatility, shares now rest at 46 cents apiece, after plunging from a high of 73 cents in March.

Investors had a tough time digesting the company’s news it executed a term sheet to acquire APIRx Pharmaceutical USA, LLC.

The price was US$93 million and Incanncex mentioned that it is budgeting $5-$10 million on product expenditure for APIRx in the first year of operation.

As TMF reported at the time, “the company claim[ed] it now has an expanded total addressable market (TAM) of more than US$400 billion annually.”

Since the announcement, shares have slipped hard and are down 31% in the past month of trade, but are up 77% in the last year.

The post How have ASX cannabis shares been performing so far in 2022? appeared first on The Motley Fool Australia.

More reading

• Incannex (ASX:IHL) share price slips on acquisition news
• Here’s why the Incannex (ASX:IHL) share price is on ice today
• The Incannex (ASX:IHX) share price is up a whopping 50% in a week. What’s the deal?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Since hitting its peak in November 2021, Netflix‘s (NASDAQ: NFLX) stock has tumbled relentlessly, losing half its value. The streaming video pioneer added fuel to the sell-off fire when it guided for much lower subscriber growth in the 2022 first quarter, suggesting that its pandemic-related growth spurt was well and truly over.

This wouldn’t be the first time Netflix’s management erred on the side of conservatism, and a growing number of analysts are suggesting that the stock sell-off has gone too far. In fact, recent analysis suggests investors could be in for a shocker when the streaming leader reports its first-quarter results after the market close on Tuesday, April 19. 

One number to rule them all

Investors have long obsessed over Netflix’s subscriber growth as the proxy for its ongoing opportunity. That’s why the stock sold off in January when management forecast just 2.5 million new subscribers for the first quarter, a significant decline from the 8.28 million it delivered in the fourth quarter. It’s important to remember that historically, the first quarter is seasonally slower for Netflix, so management’s lower guidance makes sense.

Since its peak in November, Netflix shares have slumped more than 50%. That said, a number of Wall Street analysts are convinced that its subscriber growth will easily outstrip estimates, which could lead to a significant recovery for the floundering stock. 

Analysts’ consensus estimates are currently calling for Netflix to increase its global subscriber base by roughly 2.8 million — ahead of the company’s guidance — but some on Wall Street are expecting even more robust growth. Wells Fargo analyst Steven Cahall recently raised his subscriber forecast from 2.5 million to 2.9 million, citing the firm’s analysis of monthly active users (MAUs). Guggenheim analyst Michael Morris is even more bullish, calling for 3 million net new subs, citing third-party Apptopia download data. 

The wild card

There is a wild card in the deck in terms of Netflix’s subscriber numbers. The company announced early last month that it had suspended service in Russia, in response to the country’s invasion of Ukraine. That followed earlier moves in which the streaming company refused to broadcast Russian state-controlled television channels and suspended production of all of its Russian-language original programming. 

Netflix has never reported exactly how many subscribers it had in Russia, though most analysts estimate the number between 1 million and 2 million, and have included those as reductions in their quarterly estimates.

A quick review of Netflix’s forecasts suggests that more often than not, the company beats its subscriber growth estimates, and given its tendency of being conservative in its guidance, that also makes perfect sense.

Netflix stock is currently trading at just 23 times 2023 earnings estimates, its lowest valuation in nearly a decade. This suggests that the selling may have gone a bit too far, giving Netflix the potential for an earnings surprise when the company reports results on Tuesday, April 19, after the market close. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Netflix investors could be in for a shocker this week appeared first on The Motley Fool Australia.

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Danny Vena owns Netflix. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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