GET DAILY SIGNALSNetflix (NFLX, $346.40 ) Garners More Subscribers Than Expected, Focuses on More Content
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.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
NFLX in +0.47% Uptrend, growing for three consecutive days on November 02, 2026
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where NFLX advanced for three days, in 217 of 303 cases, the price rose further within the following month. The odds of a continued upward trend are 72%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 4 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 Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 8 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.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 21, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on NFLX as a result. In 56 of 78 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 72%.
The Moving Average Convergence Divergence Histogram (MACD) for NFLX turned negative on October 21, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In 29 of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at 66%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where NFLX declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 72%.
The Aroon Indicator for NFLX entered a downward trend on October 27, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 21 (best 1 - 100 worst), indicating very 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 Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. NFLX’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 78 (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 (8.609) is normal, around the industry mean (12.963). P/E Ratio (19.300) is within average values for comparable stocks, (38.874). Projected Growth (PEG Ratio) (1.183) is also within normal values, averaging (2.376). Dividend Yield (0.000) settles around the average of (0.045) among similar stocks. P/S Ratio (6.798) is also within normal values, averaging (2.932).
The Tickeron PE Growth Rating for this company is 93 (best 1 - 100 worst), pointing to worse than average 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 Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. NFLX’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
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a provider of online movie rental subscription services
Industry MoviesEntertainment
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