Financial Trading Blog
Stock of the day 14/04/2016 – Netflix Inc
Like the rest of the markets it’s been a rocky start to 2016 for the streaming service and TV producer. Opening at $108.94 (around $20 away from its peak), Netflix had dipped below the $80 mark at the start of February, its worst price since last April. Interestingly during this slide, largely inspired by the market’s macro-movements, the company posted an impressive set of fourth quarter figures on the 19th January, figures that caused an 11% surge on the day of release.
(Source: IT-Finance.com 14/04/2016)
Not every Q4 metric met analysts’ expectations. Revenue, jumping 23% year-on-year, reached $1.82 billion, a tad lower than the $1.83 billion forecast; US subscriber growth, meanwhile, came in at 1.56 million, less than both Wall Street’s 1.62 million estimate and Netflix’s own 1.65 million forecast. Yet the company made up for these misses in key areas; earnings per share far exceeded the anticipated $0.02 at $0.10 (still a slide from $0.19 the year before), whilst most importantly, international subscription blew forecasts out of the water, surging to 4.04 million from the 3.5 million anticipated.
Frustratingly for Netflix the strength of 2016’s early bearishness overwhelmed the reaction to those stellar Q4 figures, causing the company to hit those aforementioned year lows. Since then, however, the stock has seen a fairly uninterrupted recovery, reaching a current trading price, and near 3 month high, of $109.65 (IT-Finance.com, 14/04/2016).
In terms of the company’s first quarter report next Monday, Netflix has already stated it expects to see 6.10 million net additions, whilst analysts are expecting earnings per share of $0.03 (from $0.38 last year) alongside a 40% rise in revenue to $1.96 billion.
Netflix Inc has a consensus rating of ‘Hold’ with an average target price of $139.43.
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