Netflix (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.
NFLX sees MACD Histogram just turned negative
NFLX saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on May 22, 2025. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 47 instances where the indicator turned negative. In of the 47 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for NFLX moved out of overbought territory on June 09, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 45 similar instances where the indicator moved out of overbought territory. In of the 45 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 65 cases where NFLX's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on June 18, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on NFLX as a result. In 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 .
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 of 62 cases within the following month. The odds of a continued downward trend are .
NFLX broke above its upper Bollinger Band on June 04, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where NFLX advanced for three days, in of 332 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 290 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding 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 SMR rating for this company is (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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding 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 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly 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 (5.767). P/E Ratio (51.065) is within average values for comparable stocks, (93.673). Projected Growth (PEG Ratio) (1.889) is also within normal values, averaging (2.987). NFLX has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.041). P/S Ratio (8.190) is also within normal values, averaging (30.536).
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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a provider of online movie rental subscription services
Industry MoviesEntertainment
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