Earnings season is here, and the first of the FAANG stocks to report will be Netflix (NFLX 0.35%). The provider of the world's most popular premium video-streaming service will offer up its third-quarter results next week, shortly after Tuesday's market close. 

Expectations are high with the stock hitting an all-time peak on Thursday of last week. Analysts are jacking up their price targets, a good sign heading into a telltale financial update. Can Netflix live up to the hype or will it prove mortal next week? Let's size up the scene.

Someone curled up on a couch with a remote control aimed at the TV.

Image source: Getty Images.

Earnings and chill 

The helium ahead of next week's report isn't Netflix's own act of inflating. The guidance for the quarter that it issued three months ago is actually pretty tame. The $7.477 billion it's forecasting for the three months ending in September is actually just 16.2% more than it rang up a year earlier. It would be its weakest year-over-year growth since late 2012. The top-line forecast is also a mere 1.8% sequential uptick from what it delivered in this year's second quarter.

At the time (and this was less than three weeks into the new quarter), Netflix was expecting to close out the period with 3.5 million more paid subscribers worldwide than it had at the end of June. This translates to 212.68 million paid subscribers, a 9% year-over-year increase. A projected 5% increase in average revenue per membership helps push top-line growth into the teens. 

Netflix sees, or at least saw, net income climbing a hearty 47% for the quarter. It's an encouraging year-over-year increase, but that profit of $2.55 a share is lower than what it delivered in each of its first two reports of 2021. 

Wall Street wasn't wowed by Netflix last time out. A sequential dip in domestic subscribers weighed on the market enthusiasm. However, it has been busy winning viewers again. The success of Squid Game in recent weeks helps. Management likely will announce in next week's call that the South Korean thriller series has become the most-watched new show in the history of its platform. 

Netflix has also made moves in recent months to secure new revenue streams. It will likely discuss its gaming and merchandising initiatives next week. 

Ultimately the stock will react to how Netflix performed in the third quarter and how it sees the fourth quarter playing out. Despite the buoyant share price since its latest financial update in July, analysts aren't straying too far from the company's own guidance. The consensus estimate on Wall Street calls for earnings of $2.56 a share on $4.78 billion in revenue.  

Netflix is a bellwether for the market's streaming service stocks. It won't just be its own shareholders tuning in, as viewership trends are likely pretty consistent across the leading digital platforms. There was general weakness for the industry in the second quarter as more people started heading out into the wild with improving pandemic-tackling prospects in the springtime.

Did the midsummer spike of delta variant cases bring folks back into the living room? Is the strong slate of Netflix content making it "must binge" TV again? We won't have to wait long for an answer. Netflix speaks out on Tuesday afternoon, Oct. 19.