Netflix, Inc

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NFLX
Netflix, IncNASDAQ
 
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Jan 232023

Pass the popcorn

Netflix may be having a tough time in the streaming wars, but Friday brought some good news.

  • Netflix released its Q4 earnings report on Friday which missed some estimates, but still impressed investors. The company reported earnings of $0.12 per share compared to estimates of $0.45, but met revenue estimates of $7.85bn.
  • The star of the show however was its subscriber numbers which smashed through Wall Street predictions of 4.57m with 7.66m added. The news caused its share price to rise by almost 8.5% on Friday.
  • Promisingly, the company disclosed that they are seeing comparable interest in both their ad-free and ad-supported models. However in something of a surprise announcement, they also stated that co-CEO Reed Hastings would be stepping down. Could this be a new dawn for the streaming giant?
Junior Samson / Unsplash

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Jan 192023

Investor discretion is advised

If Netflix’s recent revenue growth was a genre, it would be ‘horror’… ‘thriller’ at best.

  • Streaming giant Netflix is predicted to report its slowest ever quarterly revenue growth today, as pressures continue to mount on the company. It had hoped to combat the issues with the launch of its new ad-supported subscription plan in November. So far however, it has not caused an influx of subscribers.
  • It’s believed that Netflix will have added around 4.5m subscribers in Q4. Compared to the same quarter a year prior’s 8.3m subscribers added however, it’s not looking so good. It’s also faced increasing competition from streaming alternatives like Disney+ and Amazon Prime.
  • Netflix’s furious spending on new content might need to come to an abrupt end amidst its underperformance. CFO, Spencer Neumann, had in July said that the company’s spending will be around $17bn a year for the upcoming years. In light of its recent reporting however, that seems more than likely to change.
Venti Views / Unsplash
Dec 162022

Ailing ad performance

With streaming companies slipping down the charts this year, pivoting to an ad-supported subscription is the new hot thing. But is it working?

  • Shares in Netflix dropped by 8.6% yesterday as concerns circulate surrounding the performance of its new ad-supported subscription tier. CEO, Reed Hastings, said that he regrets not having implemented the ad-supported model sooner.
  • The new subscription tier is doing so poorly that Netflix is having to refund advertisers, who in most cases had structured their deals so that a certain viewership was required for the deal to be maintained.
  • Netflix has fallen by more than 50% since the start of the year along with several media companies including Disney, which is trying to stave off its 42% YTD drop with its own ad-supported subscription model for the Disney+ streaming service.
Bastian Riccardi / Unsplash
Oct 192022

Netflix’s latest hit

Eeeeverybody turned up to watch Netflix’s Q3 release, and boy oh boy do those guys know how to put on a show.

  • Let's start with the star of the show: subscribers. With 2.41m new subscribers this quarter, the brand added more than double the 1.09m the street was expecting and impressively reversed its sluggish growth of the last few quarters. The streamer plans to crackdown on password sharing and expects that to help them add 4.5m subscribers in Q1. Talk about a comeback.
  • Netflix also smashed expectations on both ends, with EPS of $3.10 soaring past estimates of $2.13 and revenues sneaking ahead of expectations at 7.93bn. The company said a slew of popular shows like Stranger Things and The Gray Man helped rake in the cash, but also recognizes that it’s gonna have to keep up the hits amid increasing streaming competition.
  • Shares rocketed as much as 14% in after hours trading to hit their highest levels since April when Netflix reported its first subscriber loss – if those gains hold it’s still down 57% in the last year though. The brand is “very optimistic” about its upcoming ad tier, though currency pressures still led to a forecast of $7.8bn in revenue for Q4. Either way, investor faith seems to be restored – for now.
Junior Samson / Unsplash
Oct 142022

The Netflix bulls get back in the pen

Netflix investors’ not-so-chill year just got a lil bit better when the platform comes out with the first step of its revamp plan.

  • Netflix has just revealed its new Basic with Ads subscription tier, a lower-cost advertising-supported service that will now reportedly be available in 12 countries by early November for only $6.99 a month – which will be $1 less than Disney+ and Hulu with commercials. Is this the start of a new era for the once-dominant streamer?
  • The idea here, of course, is to bring its balance sheet back to life. Netflix has been battling with subscriber retention and needs a way to shore up revenues amid a strained economy and intensifying competition in the streaming space – this represents the reversal of a long-time strategy to stay away from ads.
  • Investors and analysts alike think this could be a step in the right direction. Netflix shares popped 5.27% and are up over 20% since its June earnings report as news of the ad-tier swirled, and analysts have been hiking their forecasts. Some estimate the new tier will bring in up to 7.5m subscribers in the US and Canada next year, equal to around $600m in advertising sales.
Oscar Vargas / Unsplash
Jul 202022

Netflix catches a break

Everyone was on the edge of their seats waiting for Netflix’s subscriber numbers to roll in, and they do seem promising enough to get investors settling in to see another season through.

  • Netflix shares popped 12% in extended trading on Tuesday to touch their highest levels since April, though they’re still down over 65% YTD. The rally came on the back of a better-than-expected Q2 report, which beat on the bottom line with $3.20 but fell slightly short on the top with $7.97bn. But, that’s not where investors’ attention was aimed…
  • It was all eyes on subscriber count after last quarter’s gloomy earnings report showed people fleeing the platform. Netflix lost 970k subscribers in the quarter, which tbh isn’t great news, but it’s far better than the 2m loss it forecast last quarter. That being said, forecasts for 1m new subscribers this quarter missed estimates for 1.8m, and is a dramatic turnaround from the 20m analysts were expecting in January.
  • Netflix is getting its A into G to turn things around. It puts the declines down to password sharing, competition, and a sluggish economy; so it’s looking to launch its lower-cost ad-supported tier in 2023, it’s going to crack down on password sharing ASAP, and it’s confident in a strong slate of content. Execs ended a call with analysts on a bullish note, and prices indicate investors may hang around for another episode.
See all reported financials
Venti Views / Unsplash
Jul 142022

Netflix & commercial break

Is there anything sexier than a hemorrhoids ad playing right in the middle of Netflix & chill? Well, we doubt it, but we’ll soon be able to find out.

  • Netflix has finally chosen its advertising partner after being courted by some of the biggest tech names out there. Bets were placed on the likes of NBCUniversal and Google owner Alphabet as partners, but both got stomped out by the giant that is Microsoft, which has officially won a deal to serve ads on the platform.
  • Netflix co-CEO Reed Hastings has long been against adding commercials on the famously ad-free platform, but was somewhat forced into a corner by its first quarter of declining subscribers in Q1 – this new service will be cheaper and Hastings says it “makes a lot of sense” to attract new viewers this way.
  • The move is just in time for next week’s earnings release, which many are holding their breath for given the stock has yet to recover from the 35% it lost on the back of its Q1 release – prices have lost nearly 50% in the last three months. Netflix previously said it expects to lose 2m subscribers in the quarter.
Jeremy Bezanger / Unsplash
Jun 232022

The battle of the big tech

Apparently Netflix is in the pleasant position of having two massive firms fighting over who gets to be its ad partner. May the best brand win.

  • Prices closed up nearly 5% on Wednesday after the Wall Street Journal reported that both NBCUniversal and Alphabet are frontrunners in the race to win Netflix’s heart, trying to become the streamer’s partner on its new advertisement-supported subscription plan.
  • Both have some sweet deals for Netflix to consider. Comcast (who owns NBC) has a video advertisement division called Freewheel who can help with the technology to deliver ads and provide a solid sales team, while Google already has a relationship with Netflix as a provider of ad-buying tools, so would be chasing an exclusive deal.
  • It’ll be big business for whoever wins the deal, and investors are hoping that it’ll mean a big boost for Netflix’s revenues too. That being said, Netflix has never explored the ad-game and is lacking the necessary infrastructure, so it will likely take at least a few months for the feature to come out and even longer to show on the balance sheet.
Philip Strong / Unsplash
Jun 132022

Netflix rewinds

Netflix investors are looking for a way to quickly rewind their investment after the streaming platform gets a bearish review from Goldman Sachs.

  • Netflix slid 5.1% in Friday’s trading following a Goldman Sachs downgrade. Shares are now sitting only $8 away from the five year low they hit on May 12th, having failed to recover from April’s earnings fail – though tbf, the entire growth stock market is kinda burning rn.
  • Goldman thinks a grim economy is ruining the brand’s Happily Ever After. The investment bank downgraded the stock and slashed its price target from $265 to $186, saying Netflix is now a “show-me story”. Goldman thinks the cost of living crises will majorly impact streamers, and that the company will struggle to keep up with competition.
  • It seems Goldman is bearish on a bunch of stocks. Shares of eBay and Roblox declined 5.1% and 9% respectively after also getting handed a downgrade, with both set to feel the sting of a consumer sentiment slowdown. On the other hand, the bank expects a pivot towards discounts to try to boost loyalty, so hoorah for us.
Olga Subach/ Unsplash
May 112022

Flicking on the ads

Folks down at Netflix are considering bringing ads to the streaming service sooner than expected.

  • Following a pretty disastrous earnings report which saw a loss in subscriptions for the first time in over a decade, Netflix now looks set to bring its lower-cost subscription plan (supported by ads) forward. On top of a password-sharing crackdown, the company hopes a side hustle of ad revenue will help the bizz recover.
  • Netflix clearly wants to get back in the Big Tech league pronto. Initially, CEO Reed Hastings said the streaming giant will get a plan together for an ad-supported subscription in the “next year or two." Now, rumors suggest that could come as soon as Q4 2022.
  • So, wait. Is Netflix just gonna be like cable now? Only if you opt for the cheaper subscription offer. How cheap that’ll be is still unclear, but Netflix has cited HBO Max and Disney+ as examples of this model working well. So it seems peeps will have to pay up or sit through adverts between episodes of their 56th rewatch of The Office.
Önder Örtel / Unsplash
Apr 202022

Netflix hopes it’s all a bad stream

The time may finally have come to stop using your ex’s Netflix account, cuz a password sharing crackdown is likely on the way as Netflix reports its first subscriber decline in a decade.

  • Netflix shares cratered over 25% in extended trading on Tuesday after the company reported a mixed bag of earnings that offered more bad news than good. The streamer beat on the bottom end with EPS of $3.53 but missed estimates with revenues of $7.87bn.
  • The brand reported a loss of 200k subscribers, compared to the 2.73m analysts had expected it to add – marking the first decline in 10 years. Netflix blamed increased competition, password sharing (100m households are sharing atm), and the war in Eastern Europe – if it hadn’t halted Russian accounts, it would’ve added 500k new subscribers.
  • The company has to reassess its hard line on advertising if it hopes to avoid a more severe falloff in Q2, which is already forecasted to see subscribers drop another 2m. Netflix always said “no way, Jose” to advertising on the platform even as competitors did so, but co-CEO Reed Hastings says it’s something they’re now looking at.
See all reported financials
愚木混株 cdd20 / Unsplash
Mar 152022

A Netflix flop

Anyone out there wondering what’s gonna happen to all those pandemic winners we saw? Well, Netflix may be giving us all a preview…

🔍 Key points:

  • Netflix stock has officially lost every cent of its pandemic gains after sinking 2.74% on Monday to hit a $331 closing price – its lowest since March 18 2020 and down over 50% from its $700 high in November.
  • Competition is prolly the big bad wolf with this one. After noticing everyone and their cat’s auntie logging onto Netflix during lockdown, others have started to replicate its soaring successes. As a way to combat that, Netflix is looking at theatrical releases for its upcoming releases, but will it be enough?
  • If it makes you feel any better, the rest of Big Tech is seeing big losses this year too on the back of macroeconomic uncertainty. Amazon and Apple are both down around 15% YTD, Microsoft is down nearly 18%, Meta is down 45%, and the list goes on… maybe there’s safety in numbers?
Illustration by TradingView
Mar 032022

Netflix delves into gaming

Netflix accelerates its push into gaming with its latest $72m acquisition.

Key points:

  • Netflix is buying Finland’s Next Games for €65m ($72m). It’s the studio behind a super popular mobile game based on Netflix’s hit show “Stranger Things”.
  • Netflix has been stepping up its gaming efforts since last year as it tries to expand its business beyond streaming. It started with the addition of Mike Verdu from Facebook to help lead the new segment, and began rolling out its first mobile games in November last year.
  • It’s the streaming platform's biggest deal since expanding into interactive entertainment last July, and it follows in the footsteps of gaming giants like Microsoft’s (MSFT) Xbox and Sony’s (SONY) PlayStation – both found huge success from their small studio acquisitions.
Luis Villasmil / Unsplash
Feb 012022

Netflix stops buffering

Citigroup resets the Wi-Fi and brings Netflix stock back to life after last week’s earnings-induced losses.

  • The stock recovered 11% on Monday, a relief after slowing subscriber numbers erased $50bn off its market value on January 21 – though it’s still trading at its lowest levels since June 2020 and was one of the S&P 500’s worst performers in January.
  • Citigroup upgraded the stock to a Buy and hiked its price target to $450 from $325, arguing that Wall Street isn’t considering its ability to raise prices to make up for a lack of subscriber growth.
  • Is the sell-off a buying opportunity? Co-CEO Reed Hastings must think so, because he just bought the dip and stocked up with $20m worth of Netflix stock.
re:publica / Wikimedia Commons
Jan 272022

A Q4 post-credits scene

Netflix might be slowing on subscribers, but it seems to have a few investors that are still keen for season 2022.

  • Prices leaped 5% in Wednesday extended trading for pretty much its first positive movement since its earnings last week sent the stock spiralling over 20% on slowing subscriber numbers.
  • AT&T (T) kind of piled on with earnings that showed WarnerMedia and its HBO streaming service are winning the battle for the U.S. audience – HBO signed up 1.3m new American viewers in Q4, the same amount Netflix added in the whole of 2021.
  • But, the bulls are still charging. The price jump was thanks to news that Pershing Square’s Bill Ackman has bought the dip, adding 3.1m new shares to his arsenal to become a top-20 stakeholder and saying he’s in it for the long game. Are you?
Junior Samson / Unsplash
Jan 212022

Netflix loses its “most popular” title

Netflix gives us a sneak peek at what season 2022 has in store, and investors are not sticking around to see how it all ends.

  • Shares opened Friday down 25% to hit their lowest prices since April 2020.
  • It posted an impressive earnings beat, reporting EPS of $1.33 compared to the $0.82 analysts were looking for. Revenue of $7.71bn was up 16% y-o-y and came in on par with estimates.
  • It added 8.28m subscribers in Q4, which topped expectations of 8.19m but is the same number of subscribers added in the same period last year, and things are set to get worse…
  • Growth is slowing in a big way. It forecast only 2.5m new subscribers in the current quarter, way less than the 6.93m people were hoping for and representing its worst start to a year in over a decade.
  • The bad news comes a few days after Netflix hiked prices for the third time since 2019, making it one of the most expensive streaming services out there – and there are a lot of them.
  • It topped it all off by admitting that competition is eating into growth – its first real acknowledgement of the strength of other generals in the streaming wars. Will investors keep on watching?
See all reported financials
Ricardo Gomez Angel / Unsplash
Jan 172022

Binging on Netflix stock

Netflix raising their prices is a real bummer for whoever's Netflix account you and 10 others share, but investors are loving the news.

  • Prices popped and dropped on Friday, up 4% in intraday trading and closing up 1.25% for only its second day of gains all year.
  • Netflix lifted its subscription prices by $1-$2 a month, which the streamer will use to make some hot new content that it hopes will lure back its declining U.S. customer base.
  • It planned to spend $17bn on content in 2021 (Thursday’s earnings will shed more light on that), and is going to up that significantly this year to keep up with the market.
Li Zhang / Unsplash
Jan 072022

Are you still watching?

Is there too much chilling and not enough Netflix going on? JP Morgan seems to think so.

  • The stock tumbled 2.51% on Thursday for its tenth consecutive session in the red, falling below a key support level.
  • Investors could be in for a Q4 shock when it comes to subscriber growth, which JP Morgan now predicts will come in at 6.25m vs the 8.8m previously estimated.
  • Content is king, but there’s a lot of competition for the crown. Squid Game attracted a bunch of new subscribers at the start of Q4 but content since then has failed to wow and app downloads have been declining.
Oscar Vargas / Unsplash
Nov 232021

A beautiful day for some M&A

Netflix adds a new character to its storyline by snapping up a visual effects guru as it scales up its production skills.

  • It’s buying Canadian Scanline VFX, the visual effects company behind hits like Game of Thrones, Stranger Things, and a bunch of Marvel fan faves.
  • It’s the streaming giant’s first foray into visual effects, and the deal is expected to close early in 2022.
  • Netflix is set to spend $17bn on making and licensing films and series this year amid a big production push, so there will be plenty to keep Scanline busy.
Nov 172021

Netflix changes its tune

After years of staying chill on its viewership numbers, Netflix is changing channels and sharing all.

  • Netflix launched a new Top 10 list which ranks its shows based on total hours watched on a weekly basis.
  • Its previous metrics got loads of backlash. It was based on how many people watched the first 2 minutes, which everyone argued doesn’t accurately show popularity.
  • It’s trying to be more transparent with investors, but has been very careful to only release its blockbuster numbers.
Yulia Khlebnikova / Unsplash