Netflix soars on global expansion

Meanwhile, few investors are questioning the company’s potential to sustain the momentum, as the stock is now trading at significantly higher valuations than the industry average. Thus, Netflix is spending more money per new subscriber to get them onto the service, and that’s not a good thing. L & S Advisors Inc bought a new stake in Netflix during the fourth quarter valued at about $446,000. All in all, Netflix’s report card had multiple positives, with just the odd negative.

Total sales for the quarter grew to $2.79 billion, compared with projections of $2.76 billion. The firm had revenue of $2.79 billion for the quarter, compared to analyst estimates of $2.76 billion.

During the second quarter, Netflix spent over $608 million in cash on content, significantly up from $254 million in the same period a year ago.

Los Gatos, California-based Netflix’s second-quarter profit rose to USD65.6 million or USD0.15 per share from USD40.8 million or USD0.09 per share a year ago.

After a weak showing at the beginning of the year, Netflix is back on top. Net income was $65.6 million, bringing the FY total so far to $244 million. Both numbers are up compared to the same period in 2016, with the worldwide figure rising by 44.3 per cent.

Global subscribers make up nearly 48 million (49%) of Netflix’s total paid subscribers.

This becomes especially encouraging when combined with the company’s user addition guidance for Q3. Analysts were looking for a smaller gain of 3.2 million new subscribers.

“There’s no doubt that the most significant piece of Netflix’s earnings is its growth in subscribers, exceeding expectations with 5.2 million added over the last quarter”, Milligan says. Annual EPS Growth of past 5 years is -6.50%. But the company was helped by a “greater than expected tax benefit”. The free cash flow shortfall is expected to rise from $2 billion to $2.5 billion by year’s end, Netflix indicates. There’s still $62 million of juicy profit there, and $122 million for the first half of the year, and figure $240 million for the year.

Betting on original shows puts Netflix in pole position to win over more millennials who are shunning traditional television, analysts said.

This stock (NFLX) is ahead of its 52-week low with 91.36%. The short-interest ratio decreased to 4.1 and the short interest percentage is 0.06% as of May 31.

The stock is now moving with a Positive distance from 200-Day Simple Moving Average of about 17.49% and has a pretty decent Year to Date (YTD) Performance of 30.61% which means the stock is constantly adding to its value from previous fiscal year end price. Pivotal Research boosted their target price on Netflix from $175.00 to $200.00 and gave the stock a “buy” rating in a report on Tuesday.