Netflix Bounces Back As 12% Share Price Boost Expected on Q3 Results
The Netflix share price is expected to leap 12% when
Last week’s significant stock market correction was led down by the FAANG technology stocks that have driven much of this year’s stock market gains. A portion of those losses
Within that context, Netflix’s strong performance will bring some cheer. Together with Facebook, whose Q2 report indicated stagnation in U
The combination of the slump in share price suffered by Netflix after July’s disappointment and the recent slide for tech stocks as a sector and the FAANGs in particular had put pressure on the company to come up with the goods yesterday and investors weren’t disappointed. With competition increasing and new subscriber numbers slowing down in the USA, Netflix is heavily reliant on massive newer high growth markets such as India and Brazil to drive the growth necessary to justify its significant value multiple, which is approaching x50 projected 2019
Strong growth in subscriber numbers is particularly important to investors within the context of Netflix’s huge debt-financed
New seasons of popular Netflix original shows such as Orange is the New Black and American Vandal as well as well received brand new shows like Sacred Games and Maniac are thought to have been a factor in the strong quarter. Net income jumped to $401 million from $103 million over the same period last year, the equivalent of 89 cents a share from 29 cents a share. 69 cents a share had been the expectation. Overall revenue also leapt 34% and now stands at $4 billion, in line with forecasts. It had also been expected that the company would show some conservatism on forward guidance around Q4. However, Netflix stated it expects Q4 to yield 9.4 million new subscribers globally against
Investors will now hope that the rest of the FAANGs follow the lead set by Netflix yesterday as they publish their own Q3 results over the coming several days.
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