Even when factoring its recent decline, it has been a truly astonishing year for the media giant. Opening at $195, the company rocketed all the way to a fresh record peak of $423 by late-June, a ridiculous run for such an expensive stock.
Thanks to July’s Q2 statement – more on that below –some of the shine has admittedly been taken off the firm. However, at a current trading price of $355.90, Netflix has still risen 82.5% since the start of the year.
It is a sign of how well Netflix had been doing that it could lose 14% in a single session and it not seriously dent its overall market performance. The impetus for that decline was the company’s aforementioned second quarter results, with investors taking issue with a rather big metric-miss.
Netflix revealed that it had added 5.2 million subscribers, way off of the 6.2 million forecast by the company itself, sparking fears of slowing growth that may only worsen as Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and the like up their spending on original content. That broke down as a 674k increase in the US against the 1.23 million expected, alongside an 8% jump internationally to 4.47 million versus the 5.11 million estimated.
Revenue also fell short, despite surging 40.3% to $3.907 billion; diluted earnings per share, meanwhile, rose from 15 cents to 85 cents year-on-year.
As for the third quarter guidance, Netflix managed to disappoint on that front as well. The company is expecting a 5 million increase in global net subscribers (compared to the 5.3 million added in Q3 2017), alongside a 33.6% rise in revenue to $3.988 billion and diluted EPS of 68 cents.
Netflix Inc (NASDAQ:NFLX) has a consensus rating of ‘Buy’ alongside an average target price of $357.48.
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