Netflix will plunge today. Down about 25%. Investors are disappointed because of their subscriber growth. That said, Netflix have always been a volatile stock.
They reported Q3 EPS of $0,96 and they beat consensus by $0,03. Revenue was up +27% y/y to $1,41 billion, and hit investors estimate. They have a total paid member base of 50,65 million, and that is up +33% y/y. Free cash is down to -$74 million on higher investments.
They failed in Q3 with 3,02 million subscribers and that`s below its estimated 3,69 million. Netflix reported profits of $59,3 million, and that`s better than last years Q3 at $48,4 million.
Investors do not think that Netflix will reach their membership growth goals because they have raised prices for their new members, but earlier this year Netflix said they added 1,7 million members and that`s better than expected.
Netflix says it will add 4 million new members in fourth quarter as they have launched their service in Europe led by Germany and France. They will start streaming of all 10 seasons of Friends, and belive HBO is their biggest competitor, but they have different programs and shows.
A drop like this is a great opportunity.
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Ket Garden
Shiny bull 