Although Netflix reported better than expected earnings, the stock is down more than 8% after the company issued weak guidance; Michael Berger, Associate Editor of MoneyShow.com, highlights this technology stock and is cautious with shares at current levels.
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“Amazon Video will up the ante for acquiring new content. This creates a double-whammy for Netflix-higher content spend and slowing subscriber growth”, Pachter said. Then there is also an impending increase in the prices in the U.S. region as well as in foreign markets which may further impede the subscriber growth. First quarter results beat earnings-per-share estimates but investors are still anxious about how the company will drive subscriber adds in Q2.
Netflix will start rolling its price increase to members with grandfathered plans slowly over the year instead of all at once in May.
Helping Netflix’s first-quarter numbers were the documentary series Making a Murderer, which launched in December but helped results in early 2016; the February debut of Full House sequel Fuller House; the fourth season of House of Cards and the second round of Daredevil episodes, both in March.
Netflix in January revealed it had expanded its reach into 130 new countries.
Netflix has unveiled its Q1, saying it had added a global net increase of 6.47 million subscribers during the quarter. Ted Sarandos even said that the goal of Netflix was “to become HBO faster than HBO can become us”. That news sent Netflix shares down 11%.
Netflix, Inc. using SYMBOL/TICKER code NASDAQ:NFLX has had its stock rating noted as “Reiterated” with the recommendation being set at “BUY” yesterday by research analysts at Pivotal Research Group.
The big problem for Netflix here is showing that it can continue to grow, particularly in light of stepped up competitive pressure this week from Amazon, which just announced it was selling a standalone video package that appears tailor-made for a head-to-head battle with Netflix.
“It’s natural that everybody’s coming in as they realize that the future is Internet TV”, Hastings said.
Rundle warned that Netflix was heading for takeover target territory. About 32.82M shares traded hands or 158.22% up from the average.
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That brings its total number of streaming members to 81.5 million, about 42 percent of those outside the United States.
