Netflix, Inc.: Why NFLX Stock Surged

Netflix stockNFLX Stock Bolstered by Q4

Netflix, Inc. (NASDAQ:NFLX) jumped over eight percent in after-hours trading as the fourth-quarter earnings report came in beating analysts’ expectations, driving NFLX stock up.

There’s been a lot of buzz surrounding this week’s release of the earnings report, and it was apparently for good reason. The eight-percent hike represents a bullish take by investors as the company registered earnings of $0.15 per share and a revenue of $2.48 billion. This topped Wall Street expectations of $0.13 per share and ended up just a hair over the $2.47 billion projected revenue. (Source: “Netflix Beats On Q4 Earnings And Subscriber Growth,” Forbes, January 18, 2017.)

Beyond the financials, NFLX stock also benefited by exceeding its own subscriber growth estimates, gaining over seven million new subscribers. Its estimate for the quarter was far below at 5.2 million. This hike, in fact, was the largest quarterly gain in viewership in the company’s history, Netflix released.

NFLX stock finds itself fueled by international expansion and some of its newer, prestige original content. While being available in 190 countries is definitely a solid way to reach subscribers, hot original content like The Crown and House of Cards along with distributing rights for films like Beasts of No Nation have helped catapult Netflix beyond your average streaming service. The Crown, for example, won two of the most coveted awards at the Golden Globes: Best Drama Series and Best Actress in a Drama Series.

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In addition to the goodwill garnered from the earnings report, there’s a lot to like looking down the line for NFLX stock.

The company’s partnership with Walt Disney Co (NYSE:DIS) grants the streaming service exclusive access to not only hugely popular Disney brands, but also Marvel, Pixar and Lucasfilm productions. (Source: “2 Reasons to Buy Netflix (NFLX) Stock Ahead of Earnings,” NASDAQ, January 18, 2017.)

On the flip side, the streaming space is only getting more crowded, with tech heavyweights like Amazon.com, Inc. (NASDAQ:AMZN) muscling in on the industry with its own offerings. Still, NFLX stock does seem to reign supreme in the industry due to its global user base, bevy of original content, and name recognition as the current leader among streaming services.