The first quarter of 2020 is now behind us, and it was the worst first quarter ever for the stock market. The COVID-19 pandemic has wreaked havoc on economies worldwide and wiped out trillions in market value. With so many schools and businesses still closed to contain the outbreak, investors are wary.

In the coming weeks, all eyes will be on the quarterly reports of major corporations as management teams offer revised outlooks for the rest of 2020. Several technology companies like Apple and Microsoft have lowered their forecasts for the first quarter. However, as millions of people are stuck at home, entertainment companies like Netflix (NASDAQ:NFLX) have actually seen growing demand for their services. 

While the Dow and S&P 500 fell 23% and 20%, respectively, in the first three months of the year, Netflix stock gained 16%. Already a star in this bear market, the streaming company is set to release its first-quarter results on April 21. If Netflix can manage to beat consensus estimates for the period and provide better-than-expected guidance, the stock is likely to soar toward its all-time high.

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What does Netflix expect for the first quarter?

Netflix has forecast revenue of $5.73 billion and diluted earnings per share of $1.66 for the first quarter of 2020. Analysts' consensus estimates closely match the company's figures.

Last month, telecom giant AT&T said that Netflix's data traffic touched all-time highs on its network. The streaming giant also had to dial down its video quality in Europe and Canada to reduce bandwidth consumption in the face of rising demand as the pandemic keeps people at home. With limited entertainment options, Netflix is a pretty obvious choice for millions of people right now.

Focus on original content

Netflix actually surpassed 100 million paid subscribers outside the U.S. during the fourth quarter, and international markets accounted for over 90% of total net subscriber growth in that period. At home, the company has a long-term target of between 60 million and 90 million subscribers, which still leaves it some room for domestic expansion. 

A streaming platform

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Its service is available in more than 130 countries since launching internationally in 2011. It has invested heavily in developing original content to serve these new markets. Though the company has faced broadband and payment infrastructure challenges in certain countries, these issues should ease in the coming years.

Netflix's focus on creating non-English originals is a key driver of that subscriber growth abroad. Management noted in its fourth-quarter earnings release, "Local originals were the most popular 2019 titles
in many countries, including India, Korea, Japan, Turkey, Thailand, Sweden, and the U.K." 

The company is optimistic about its long-term content strategy as originals help the company grow user engagement, improve customer retention, and drive paid memberships higher. For example, over 83 million households watched 6 Underground, a Netflix original film directed by Michael Bay, in the first four weeks since its release last year. Other movies produced by the service have started to gain critics' recognition, too. Eight of its films, including The Irishman, garnered a total of 24 nominations in the 2020 Academy Awards.

Netflix is also looking to produce more original animated content. It hired creators who have worked for top studios, including Disney, Pixar, and Illumination, and the company released its first animated feature film, Klaus, which was nominated for an Academy Award.

Netflix still a solid long-term bet

Whether Netflix will be able to beat or even meet first-quarter guidance is largely irrelevant for long-term investors. The streaming heavyweight ended 2019 with 167.1 million paid subscribers, an increase of 20% year over year. This number is estimated to reach 174.1 million in the first quarter, up from 148.9 million in the prior-year period.

The upcoming decade will see a huge shift in the consumption of streaming content, which has already resulted in a surge of new competition from entertainment giants such as Apple and Disney. Both companies launched their own streaming services in the last few months, and others -- including an offering from Comcast -- are on the way. 

However, there is room for multiple winners in this industry -- U.S. families subscribe to 3.4 streaming services on average, according to a Forbes report.

So there's a good chance the company will be able to beat consensus estimates for the March quarter due to the near-term spike in demand for streaming services. This should drive the stock higher post-earnings, and even with new competition, Netflix is still attractive as the largest player in the streaming industry.

With an expanding content portfolio attracting more paid subscribers each quarter, the technology company is well-positioned to maintain its leadership position -- and its growth trajectory -- in the next decade.