Netflix Inc (NASDAQ:NFLX)
Netflix Earnings
On Wednesday after the market closed, Netflix ($NFLX) announced fourth quarter earnings that beat on expectations and sent shares skyrocketing more than 9% in the post market session. The company announced net income of $66.7 million or 15 cents per share on $2.48 billion in revenues while analysts were looking for 13 cents per share on $2.47 billion in revenue.
What was most impressive was how much $NFLX grew in the fourth quarter. The company was expecting about 5.2 million new subscribers, but they blew past that with 7.05 million new subscribers. This is almost double what they did in the third quarter, which was 3.57 million. They attribute their strong growth to oversea subscribers, with 5.12 million subscribing alone in the fourth quarter, along with popular original content like Stranger Things and Narcos sparking new interest in the company.
Currently analysts have an average price target of $140.74 but we will most likely see some upgrades over the coming days.
NFLX Technicals
Looking at the 5-minute chart above you will see that shares exploded on the earnings news before topping out at $146, marking a 9.5% jump in value from today’s closing price of $133.26. This puts shares in unfamiliar territory as they hit new highs. However, we should see resistance come in at big round numbers like $150 with support back at $135.
Expect shares to extra volatile tomorrow as traders look to enter and exit their trades. Generally after a big pop up like this we will see a bit of a pullback at the open as longs lock in some profits. However, on their last earnings beat shares jumped up and didn’t look back for another 5 days, so be ready for anything! What we do know is there should be plenty of opportunities on this stock over the coming days for active traders to capitalize on.
CEO Comments
“This quarter marks the 10-year anniversary of our launch of streaming,” CEO Reed Hastings said in a letter to shareholders. “The next decade will be even more amazing and tumultuous as internet TV supplants linear TV, and as we strive to remain a leader.” –InvestorPlace
Company Profile
Netflix, Inc. operates as an Internet subscription service company, which provides subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail. The company operates its business through the following segments: Domestic streaming, International streaming and Domestic DVD. Netflix obtains content from various studios and other content providers through fixed-fee licenses, revenue sharing agreements and direct purchases. It markets its service through various channels, including online advertising, broad-based media, such as television and radio, as well as various partnerships. Netflix was founded by Marc Randolph and Wilmot Reed Hastings Jr., on August 29, 1997 and is headquartered in Los Gatos, CA.