Netflix and its "crazy" new episode!

Netflix is one company that provides subscription streaming entertainment service. The service includes TV series, documentaries, and feature films. Since mid-March 2020 after the negative shock due to COVID-19, the stock price has increased dramatically till early-July 2020. One can view this by the following reasons: COVID-19 pandemic shifts our life to stay-at-home mode, and consumers have watched more television because theaters, live music and sports were shut down. It is understood that Netflix stock performance is linked to its net subscriber additions, and during the lock down, the number of subscribers definitely increased globally. However, such steady increase did not continue after early-July, and the stock price fluctuated widely around 500 since then.   According to the candlestick chart for Netflix shown, there are three major peaks right at the beginning of each quarter. One recent jump is on Jan 20th, after the company posted fourth-quarter results and predicted a huge jump in earnings in the first quarter. The stock price experienced a nearly 17% gain, then it remains around that level till now. And many explained that the driving force behind that expansion was Netflix’s international markets. The company added 7.7 million new users outside of the U.S. and Canada in the quarter, with a huge 4.46 million coming from other countries. As it is shown in the Financial statement, for 2020Q4, Netflix has a total revenue of 6.64billion and earning per share of 1.19 which is lower than estimated 1.36. Meanwhile, the company said it is close to being free cash flow positive and will consider returning cash to shareholders through buybacks. Overall, the performance of Netflix looks good, and many people believe it will continue to do so. However, the situation might be ambiguous when COVID-19 ends, which requires further analysis. Information Sources: https://finance.yahoo.com/news/why-netflix-stock-is-going-haywire-after-its-latest-earnings-report-114430671.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHpZOSYr7IALD35gnkiTYEnbWXot3ook2SHU5fjbXebGQfV0rvQRaz2BWuSyCcNBDrNODNnlRTn0CDnIwGn3nFA4s4RDALw6CccHpYUqUSlFXMa1TuCPMUqMvKaPkzrINa8d85_BLSP8L8ho1XpicHLx7fwRFq053H5IT4HrvGoL https://www.nasdaq.com/articles/netflix-stock-looks-scary-after-17-surge-on-wednesday-2021-01-23 https://finance.yahoo.com/news/netflix-international-expansion-fueled-subscriber-growth-225708669.html

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Netflix and its "crazy" new episode!

bullish

Netflix is one company that provides subscription streaming entertainment service. The service includes TV series, documentaries, and feature films. Since mid-March 2020 after the negative shock due to COVID-19, the stock price has increased dramatically till early-July 2020. One can view this by the following reasons: COVID-19 pandemic shifts our life to stay-at-home mode, and consumers have watched more television because theaters, live music and sports were shut down. It is understood that Netflix stock performance is linked to its net subscriber additions, and during the lock down, the number of subscribers definitely increased globally. However, such steady increase did not continue after early-July, and the stock price fluctuated widely around 500 since then.  

According to the candlestick chart for Netflix shown, there are three major peaks right at the beginning of each quarter. One recent jump is on Jan 20th, after the company posted fourth-quarter results and predicted a huge jump in earnings in the first quarter. The stock price experienced a nearly 17% gain, then it remains around that level till now. And many explained that the driving force behind that expansion was Netflix’s international markets. The company added 7.7 million new users outside of the U.S. and Canada in the quarter, with a huge 4.46 million coming from other countries.

As it is shown in the Financial statement, for 2020Q4, Netflix has a total revenue of 6.64billion and earning per share of 1.19 which is lower than estimated 1.36. Meanwhile, the company said it is close to being free cash flow positive and will consider returning cash to shareholders through buybacks. Overall, the performance of Netflix looks good, and many people believe it will continue to do so. However, the situation might be ambiguous when COVID-19 ends, which requires further analysis.

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read-time
1 min

621.69

Target Price

7/ 10

Confidence

2-6 Months

Timeframe
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Earnings Release
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