Netflix Inc. (NASDAQ: NFLX)
Netflix Earnings
After the close on Tuesday, Netflix Inc. (NFLX) released earnings that sent shares surging in the post market session to highs of $123.04 before settling down and consolidating in the $115 range. NFLX beat analyst’s expectations comfortably with 10 cents earnings per share on $1.82 billion in revenue while analysts were looking for 2 cents per share on $1.83 billion in revenue. “The company said it ended 2015 with a net addition of 17 million members, just shy of 75 million members by the end of the quarter. It predicted it will grow by more than 6 million users in the first quarter given its international expansion.” (MarketWatch) This comes just weeks after announcing that they will be entering more countries with huge potential to gain more subscribers.
The biggest beat from NFLX’s earnings report was the amount of foreign customers that signed up. Analysts were expecting international subscriber growth to reach around 3.5 million but NFLX crushed that with over 4 million new international subscribers. “We are starting by primarily targeting outward‐looking, affluent consumers with international credit cards and smartphones. As with every market we’ve launched, our approach is to listen, learn and improve rapidly, adding more content,” Netflix said. Currently analysts have an average price target of $124.36 but we will most likely see some upgrades in the near future.
NFLX Technicals
NFLX closed the day at $107.89 right before they announced earnings, which sent shares soaring in the post market session with highs coming in at $123.04 as you can see in the 5-minute chart. We should some resistance come in at the big $125 level and $123 while support will be met at $115 and 114.50. Looking at the daily you can see that shares just bounced off the 200-day moving average currently sitting at $102.79 on what looks like decent buying volume. With this surprise earnings release I would expect a nice bounce but after a big move like this in the after market session we might see some profit taking, which could provide you the opportunity to get in at a better price. Futures are currently down over 1.5% in the premarket which will most likely weigh on NFLX’s price action as well so we’ll have to watch around key pivot levels for a decent entry point.
Company Profile
Netflix, Inc. operates as an Internet subscription service company, which provides subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail. The company operates its business through three operating segments: Domestic streaming, International streaming and Domestic DVD. Netflix obtains content from various studios and other content providers through fixed-fee licenses, revenue sharing agreements and direct purchases. It markets its service through various channels, including online advertising, broad-based media, such as television and radio, as well as various partnerships. The company was founded by Marc Randolph and Wilmot Reed Hastings Jr., on August 29, 1997 and is headquartered in Los Gatos, CA. (MarketWatch)
