netflix stock price
Netflix (Nasdaq: NFLX) stock had a very short-lived boost from Monday's earnings report.
The earnings report showed great news for the company - Netflix reported it ended Q3 with 29.3 million paid domestic users. The video streaming giant added 1.3 million U.S. customers in the third quarter and is on track to surpass Time Warner's HBO in paying viewers.Here's what all this will mean for Netflix stock in 2014...
Buy, Sell or Hold: Why Investors Need to Tune in to Netflix
In the new age of media all roads lead to streaming content. Whether it's music, movies or TV Shows, how entertainment gets delivered is never going to be the same.
As this secular change takes place, traditional media companies are now scrambling to get their piece of action.
Where this "movie" really gets interesting for investors is the path they are going take to claim their share of the streaming pie - especially if you own Netflix, Inc. (NASDAQ: NFLX)
That because Netflix has laid the groundwork to be the leader in the new world of streaming media. And on Jan, 23, the plot thickened even more when the company reported its Q4/2012 earnings and blew away everyone's expectations.
Netflix posted earnings per share of 13 cents on revenues of $945 million. Both handily beat consensus estimates, which called for a loss off 13 cents per share and revenues of only $934 million.
But one of the most important items for investors to note from the earnings release was that Netflix added over 2 million new domestic subscribers (at $7.99 per month) in the fourth quarter. In all, NFLX ended the year with 25.47 million paid subscribers - well ahead of expectations.
As a result, the company's is up 66% in eight trading days. The rocketing share price has pushed its trailing 12-month P/E up to 578 and the forward P/E to 60.
Now ordinarily gaudy numbers like these would make me pass on a company like this as an investment - but "hold" on while I make a case for Netflix.
Netflix Earnings Report (Nasdaq: NFLX): Rough Times Ahead
Today's (Tuesday's) Netflix Inc. (Nasdaq: NFLX) earnings report was better than expected, but turned off investors with weak guidance for the rest of 2012.
For the second quarter Netflix reported earnings per share of 11 cents. Profit hit $6 million, a huge improvement from last quarter's $4.5 million loss. Revenue was up almost 13% to $889 million, up from $789 million in the second quarter of 2011.
Netflix earnings beat analysts' forecasts of 4 cents per share on revenue of $889 million, but fell short of last quarter's $1.26 earnings per share.
Netflix reported it added 1.1. million subscribers in the second quarter, to total more than 27 million users worldwide. They had projected adding between 200,000 to 800,000 subscribers, lower than the 1.7 million subscribers added last quarter.
But the company said it might not meet its goal of totaling 7 million U.S. subscribers in 2012. Netflix projected an additional 1 million to 1.8 million U.S. streaming subscribers in the third quarter, and unless it hits the high end, it will likely fall short of 7 million by year's end.
For its third quarter, Netflix said it expects to lose as much as 10 cents a share, or earn as much as 14 cents a share. That range would give a midpoint of a profit of 2 cents a share.
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