Coinstar (NASDAQ:OUTR) investors think they're braced for the worst. 

Analysts see revenue growing just 2% through the first three months of this year, with profitability taking a big hit. Don't make the mistake of thinking that this is as bad as it can get. Coinstar stock could still be a colossal disappointment when it reports on April 25.

In this video, Rick explores why the company behind the disc-renting fleet of Redbox machines could be in for a choppy quarter. Coinstar's decision to team up with Verizon (NYSE:VZ) to take on Netflix (NASDAQ:NFLX) is too little, too late, and the venture will ultimately crush margins as it struggles to woo streaming video buffs.

Financially speaking, Rick wouldn't be surprised if Coinstar backs off its full-year guidance issued in February. There's little reason to expect Coinstar to post double-digit growth in the future.

There won't be a Hollywood ending for Coinstar stock, and it could be dangerous to own the shares heading into the report itself.


Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.