Netflix, Inc

Netflix, Inc NASDAQ
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History of NFLX

Important events

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
Oct 202021

Netflix tops expectations

Netflix naps a third quarter success, beating expectations on earnings and subscriber growth, but the upcoming Christmas period comes with a warning.

Netflix reported its third quarter earnings on Tuesday, exceeding expectations with earnings per share of $3.19 on forecasts of $2.56, adding 4.4 million global paid subscribers compared to the 3.84 million analysts were expecting. Revenue came on par with forecasts at $7.48 billion, up over 16% from the year before. Executives see another 8.5 million new subscribers signing up in the fourth quarter, and issued revenue guidance of $4.4 billion. The company said in its report:

We’re very excited to finish the year with what we expect to be our strongest Q4 content offering yet, which shows up as bigger content expense and lower operating margins sequentially.

Fans are eagerly waiting for an onslaught of content that was held back due to COVID – Squid Games is already estimated to be worth nearly $900 million to the company – but with a wave of new programming comes a wave of new costs. The media giant has warned that profitability may take a hit from the increased expenditure. Netflix co-Chief Executive Reed Hastings said about the upcoming slate of new material:

We’re in uncharted territory. We have so much content coming in Q4 like we’ve never had, so we’ll have to feel our way through and it rolls into a great next year also.

Deutsche Bank's Bryan Kraft downgraded the stock, cutting his rating from hold to buy and keeping his price target at $590 – ove 8% under Netflix’s current price. Kraft said:

While, on the one hand, we share the market's enthusiasm toward Netflix's very strong 4Q content slate and the optionality it brings to 4Q net adds; on the other hand, we think a 4Q subscriber beat is already more than priced into the stock.

Despite the earnings beat, Netflix was down in after-hours trading on Tuesday.
Jul 222021

A mixed bag for Netflix

Netflix releases its second quarter earnings, but despite hitting subscriber and revenue expectations, the streaming giant falls short on its earnings and guidance, and shares chill 3.28%.

Shares of Netflix fell 3.28% on Wednesday on the back of mixed Q2 earnings, missing on earnings and falling short of guidance expectations but slightly exceeding revenue forecasts. The content platform reported earnings per share of $2.97 compared to the $3.16 analysts were expecting, on revenues of $7.34 billion versus expectations of $7.32 billion. Global paid subscriber additions came in at 1.54 million, up 11% to finish the quarter with 109 million paid memberships, compared to the 1.19 million people expected to sign on in that time.

COVID has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through. We continue to focus on improving our service for our members and bringing them the best stories from around the world,

the company said.

Netflix is coming off a pandemic-fuelled bumper crop of new subscribers, but other media companies jumping onto the streaming train are making for some heavy competition in the market. The company also gave lackluster Q3 subscriber guidance, expecting to add around 3.5 million in the third quarter, much lower than the 5.5 million that investors were hoping for.
Jun 232021

ET, phone... Netflix?

The streaming game is getting kinda crowded, but Netflix is determined to stay in the race: inking a deal with the iconic Steven Spielberg’s production company this week for some new and exclusive flicks. Prices bump 2.38% on Tuesday in response, but Spielberg gets some stick for switching.

The streaming wars are only getting more intense as deep-pocketed rivals like Amazon and Walt Disney jockey for talent and content. Let’s be honest, we all watched a lot of TV last year – not great for our waistlines maybe, but fantastic for streaming services, both old and new. The largest streaming services finished 2020 with a combined U.S. subscriber base that was up by 50%, full of eager shut-ins desperate for new content.

Disney+ has hit the scene with a sledgehammer, making impressive inroads both nationally and across the world. Amazon recently took over MGM in a $8.5m deal to bolster its Prime Content (although the acquisition is currently being investigated by the Federal Trade Commission… uh oh), while HBO Max is beefing up its service after parent company AT&T decided to merge WarnerMedia and Discovery.

So while it might have started off ahead of the pack (and is still the most popular global streaming platform with 208 million members), Netflix is going to have to run a bit faster now if it wants to keep up.

But don’t worry! It has a plan! And a big part of that is making sure it’s got top dog content that keeps people coming back. In a bit of a coup, legendary filmmaker Steven Spielberg has signed a multiyear deal to make a bunch of new films for the platform. Given that only two years ago Spielberg basically spat all over streaming services, the new contract is kind of a win.

Once you commit to a television format, you're a TV movie. Certainly, if you're a good film, you deserve an Emmy. But not an Oscar,

he said back in 2018.

Guess he changed his mind. And the internet is finding it hilarious.
Steven Spielberg in 2019: Netflix movies are not Oscars worthy. Steven Spielberg in 2021: Netflix and I have just signed a deal to make movies together. I wonder what could have possibly changed his mind?
Apr 212021

Netflix subscriber slowdown

Netflix stock chills to the point of going backwards after earnings come out showing significantly slowing subscriber numbers.

One of the key questions regarding Netflix has always been whether the streaming giant would be able to maintain its subscriber growth as competition from new streaming services and other forms of entertainment grows - which it has done exponentially, especially during the last year while we’ve all been trapped at home. Well, investors finally have a hint, and it's not looking good. Netflix reported earnings per share of $3.75 compared to $2.79 expected, and revenue was up 24% from the same period last year at $7.16 billion compared to $7.13 analysts expected. So far so good, but the kicker was the weak 3.98 million new global subscribers versus the 6.2 million expected by analysts, and its own 6 million forecast. The company said that the slowdown in subscribers could be attributed to the ongoing pandemic, which forced the delay and shut down many of its big name films and shows.

“We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays,”

Netflix said in its letter to shareholders. Production was interrupted in 2020 by pandemic fallout, but the company was able to sustain itself (and its desperately bored viewers at home) with projects it had completed before lockdown, like the wildly popular Bridgerton. So it’s only now having an effect.

Previously, Netflix had also attributed its 2020 boom to the pandemic: around this time last year the company won 16 million new subscribers in just three months, and thanks to Covid the streaming service had $1.9 billion in positive free cash flow at the end of 2020, and in its last earnings said that it hoped to break even on a cash flow basis within 2021.

The good news is, Netflix expects its content to pick up again in the second half of the year. Production is back up and running in most of its main markets, and if all goes to plan the company will spend over $17 billion in cash on content this year.