Despite a rare earnings miss from Netflix after market close yesterday, Netflix shares rocketed 13% higher in pre-market trading on Wednesday at it passed the 200 million paying subscribers mark, indicating the stock will open at a record high.
The company surpassed 200 million paid subscribers for the first time, powered by a world continuing to consume large amounts of content at home during the COVID-19 pandemic. Meanwhile, the raw numbers on the quarter suggest Netflix hasn’t seen subscribers balk at its latest price hike that hit in October.
“Importantly, while Netflix beat subscriber expectations in all major territories, Netflix’s most mature market U.S./Canada reported materially better than expected nearly +900K net new subscribers (vs. our +375K expectation) which highlights that the ultimate penetration for NFLX services globally could be higher than anticipated,” pointed out Pivotal Research Group analyst Jeff Wlodarczak.
Netflix guided to a first quarter operating margin of 25%. That would be a meaningful step up from the already impressive 14.4% rate in the fourth quarter. It added this nugget in the earnings release “we believe we no longer have a need to raise external financing for our day-to-day operations.” The company also raised its cash flow guidance for 2021 by $1 billion to breakeven… Netflix signaled it may resume stock buybacks soon, as it did from time to time from 2007 to 2011.
MacDailyNews Take: Obviously, the COVID-19 pandemic offered a silver lining for those companies like Netflix, and Apple, that offer products and services for those working and schooling from home. Home entertainment providers were bound to surge higher.
Netflix’s figures:
• Net Sales: $6.64 billion versus $6.63 billion estimate
• Diluted EPS: $1.19 versus $1.36 estimate
• Global paid subscriber additions: 8.51 million versus 6.03 million expected
I like Netflix. They pioneered something unique, wonderful, and new. It seemed cheap when the other content companies decided to pull their stuff from them and set up their own knockoff services. It makes things more expensive and complex for the consumer.
Not a big movie fan, especially with the assholes in Hollywood today. Not a fan of sitcoms, sports, music, or the “news”, comprised of today’s assholes. Since I don’t watch TV, I ditched cable. I have internet and found a few websites that offer free streaming of products from yesteryear which is all I need if I want to waste a few brain cells watching the sublime. Otherwise, streaming services, be it Apple, Netflix, Disney, Hulu or whatever, has no value for me, but if you like it, great!
Only 2 out 10 are good even in the best of times.
But everyone likes a DIFFERENT 2 out of the 10.