Tag Archives: Reed Hastings

Netflix`s 43 percent jump in streaming revenue was its best in history

What investor on this planet didnt like Netflixs Q1 2018 revenue growth of 43 percent? Netflix has been one of my favorite stocks in many years and is still a favorite. But what investors are concerned about is their amortization of streaming content that is not keeping pace.

Netflix`s amortization of streaming content is up «only» 33 percent which is still very good, and their earnings growth is up 60 percent YoY. This is absolutely impressive. Despite the fact that their revenue growth is astonishing, CEO Reed Hastings has sold 8 percent of his stock.

 

Netflix is still expanding and according to Financial Times, the company will raise its investment in content across Europe and plans to spend about $1 billion on original productions this year. The revised budget will be more than double that of last year.

Netflix also unveils ten new European projects, and second season of «Glow» which will be released on June 29. Those who criticize their spending should be quiet, because the growth is unbelievable for a tech company that has been on the market for more than two decades.

Netflix added 7,4 million more streaming subscribers with 5 million of them outside the U.S, and higher subscription prices on top of their growing customer base gave them a huge boost for their revenue.

Netflix`s 43 percent jump in streaming revenue was its best in history.

Netflix reported $290,1 million in net income for the first quarter and that alone is more profit in three months than the streaming company had for the entire year of 2016.

Whats really funny is to see how Netflix in their own earnings report every quarter in a shareholder letter are describing their competitors. Netflix has been in the market for a couple of decades, but the competition has changed in the past year.

Last year, they were talking about «skinny bundles» and Amazon.coms sports ambitions, but new they mentioned Amazon, Apple, Facebook, Alphabets Google, YouTube and Walt Disney. Netflix are talking much about the iPhone maker and predicted how Apple will incorporate original content it has begun to purchase.

«Apple is growing its programming, which we presume will either be bundled with Apple Music or with iOS,» Netflix said. More companies are entering the market. Apple has reported that they will invest about $1 billion on original video content.

Netflix pointed out that it doesn`t seem to think Facebook and YouTube are truly competitors, as they are supported by ads instead of subscriptions.

Their biggest competitor may be former partner Disney. They split with Netflix last year, and started its own streaming services. Disney acquired 21st Century Fox and Hulu will also be owned by Disney after the deal with Fox.

Netflix`s market cap is $132 Billion.

 

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7 for 1 stock split in Netflix

Netflix shares are up 3,24% AHT right now. The company announced earlier today the plan designed to make Netflix shares more affordable to average investors. If everything goes like planned and the share prices holds on Wednesday, the shares of Netflix will hit a new all-time high.

Netflix said earlier this year (april) that it had plans to split the stock and that is what will happen on Wednesday. The stock can go up to $700, but the split will of course change the price but not the valuation of the company.

The valuation is $41 billion and that is making it the best performer in the Nasdaq 100 so far in 2015. Wow! That is pretty impressive. The stock is up 100% since January 2015! All time high for Netflix is $692,79 on June 10.

 

 

netflix-logo

 

A year ago, Netflix had about 48 million subscribers, but new shows like «House of cards» gave the company more subscribers, and now they account for about 62 million subscribers world-wide. The U.S growth is strongly helped by new shows like «Bloodline» and «Unbreakable Kimmy Schmidt».

The company`s share price has a history of many roller coaster rides. In the last 52 weeks range, the stock has gone from $315,54 to $692,79. Revenue in Q1 came in at $1,57 billion with a growth rate of 24%.

Share price on thursday is $681,19. EPS: 3,84, while Price earnings is 177,25.

CEO Reed Hastings is doing a good job.

 


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