Netflix reported a 'drama'tic subscriber growth. Adding almost 7 million viewers in its third quarter, the online video streaming giant beat estimates of around 5 million. That makes its number of worldwide subscribers more than 137 million.
This could potentially turn the tide for the company, after it fell short of expectations in user growth in the preceding quarter. Netflix hopes to add another 9.4 million subscribers in the last part of this year.
On Tuesday, CEO Reed Hastings attributed the discrepancy between the company's subscriber estimates and its actual figures to a "forecasting" issue. He said that going forward, the company will focus on paid subscribers — versus the existing calculation that includes people who are using free trials. Minus those on free trials, Netflix has about 130 million paid subscriptions. Nevertheless, Netflix's third-quarter earnings per share (EPS) beat estimates, at 89 cents versus the 68 cents forecast by analysts.
The company's growth/marketing strategies for the international market seems to be paying off big time. At a conference last February, chief financial officer David Wells said the company would have about 80 foreign-language productions in 2018. Gaining an additional 6 million of new international subscribers in the latest quarter, Netflix said the figure exceeded its initial prediction.
A key area the company is focusing on for its global audience is content production, thereby potentially heating up competition with media giants Disney and AT&T's WarnerMedia, (who are working on developing their own online streaming segments) and with entrenched players in the space such as Amazon’s Prime and Alphabet's YouTube. Slated to spend about $8 billion on programming in 2018, Netflix said it is expecting negative free cash flow of $3 billion this year, and has similar expectations for next year. (Free cash flow is the cash that remains after a company has covered its costs and capital expenses).
In addition to its growth and success in original programming, Netflix also sees viable opportunities in licensing content from other companies. "We've been a pretty dependable buyer," Chief Content Officer Ted Sarandos said. He indicated that other studios might earn healthy returns by selling some of their content to Netflix.
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where NFLX declined for three days, in of 295 cases, the price declined further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on April 17, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on NFLX as a result. In of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
NFLX moved below its 50-day moving average on April 19, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for NFLX crossed bearishly below the 50-day moving average on April 23, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where NFLX's RSI Oscillator exited the oversold zone, of 21 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
NFLX may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 286 cases where NFLX Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. NFLX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock slightly better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (12.920) is normal, around the industry mean (5.400). P/E Ratio (51.065) is within average values for comparable stocks, (87.119). Projected Growth (PEG Ratio) (1.889) is also within normal values, averaging (2.822). NFLX has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.040). P/S Ratio (8.190) is also within normal values, averaging (29.645).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a provider of online movie rental subscription services
Industry MoviesEntertainment