Research archive for NFLX

I'm a fan of the weekly "Lunch with the FT" feature, where a senior journalist from the Financial Times has lunch with an interesting person. In this one, the FT's global media editor, Alex Barker, interviews Netflix CEO Reed Hastings.

I was chatting to a client earlier this year who was concerned about buying Netflix shares, because they seemed to have too much competition. My reply to her was that Netflix was the prime mover in an industry that was booming, creating space for lots of successful operators. Growth in streaming video is exploding, particularly since the pandemic began. Take a look at the chart below, which is from Axios.

On Thursday night last week, after the bell, Netflix reported their second quarter numbers. Before I go into the numbers lets remember that Netflix is a business that has benefited from economies around the world going into lockdown. The share price has reflected that. When the rest of the market was collapsing, the NFLX share price barely budged. So far this year the share price is up 51%.

Netflix reported its first quarter earnings, showing a record jump in global paid subscriber additions of 15.77 million. The company was only expecting 8.2 million. This massive surge in new subscriptions was due to people staying at home and seeking entertainment as the coronavirus was starting to disrupt daily life around the planet.

Netflix issued its results after the closing bell in New York last night. At this time of year (aka. our summer) that's only at 11pm. I was sitting up in my pyjamas, struggling to stay awake, anxious that I would only get a few hours of sleep before having to jump out of bed for my group run at 5am through Hillbrow and the Noord Street taxi rank.

It is always nice owning a stock that pops after a set of good results. On Wednesday night after their third quarter numbers, the Netflix share price jumped up by around 10%. The results were mixed but profits came in at $665 million for the quarter, higher than the $470 million estimated by Wall Street.

A long standing and very good client of ours wrote to me yesterday, asking "Is it time to sell Netflix?" My answer was no! I'm also a Netflix shareholder, and I'm buying at current levels.

Netflix is a stock that 95 Vestact clients own in new York. On Wednesday after-market, Netflix released second-quarter numbers saying that overall subscriber numbers came in well below what the company projected and that for the first time in eight years, US subscriber numbers dropped. Not good! The last time subscriber numbers dropped in the US, the company was splitting into DVD mail-order system and a streaming platform!

When you create good shows or movies they become brands on their own. Look at how Disney has leveraged off its characters to make theme parks, games, toys and many other products. Did you know that Disney makes 34% of its revenues from Parks and Resorts alone? That is over $20bn a year. They also make $4.6bn of their revenues from Consumer Products and Interactive Media. That equates to profits of $1.6bn.

It is articles like this that makes Netflix a must have. Fantasy Card Game's Netflix Deal May Be Magic for Hasbro.

The first Vestact recommended stock to come out with quarterly results was JP Morgan. The second, out yesterday, was Netflix. The video streaming giant reported revenue of $4.52 billion, up 22.2% year-on-year.

Statista had two great infographics on Netflix recently. This first graph shows how the last quarter was their best in terms of adding subscribers. It clearly indicates that future growth for the company will come from their international audience.

Last night Netflix reported their 4Q and full year numbers. Let's deal with the quarterly figures versus consensus first and then talk about how 2018 was for the company.

According to Techcrunch, Netflix is testing a mobile only subscription in Malaysia to make their services more affordable. This service will cost $4 a month.

While everyone is distracted by social media and accusing Netflix of targeting ads to users based on their race (I don't remember ticking a race box when I signed up for Netflix but whatever!). The company announced that it would be raising $2 billion in capital by issuing some high-yield bonds. The cash will fund more original blockbusters to stay ahead in the contents arms race.