Netflix (NFLX) Stock: Gaining Big on Strong Earnings

Netflix, Inc. (NASDAQ: NFLX)

Netflix is having an incredibly strong day in the market today, and for good reason. Recently, we’ve seen a ton of reports that with a small price increase, the company’s earnings would suffer. However, that proved not to be the case when the company released Q3 financial data after the bell yesterday. Today, we’ll talk about what we saw from the earnings report, how the stock reacted to the news, and what we can expect to see from NFLX ahead. So, let’s get right to it…

NFLX Reports Strong Q3 Earnings

As mentioned above, Netflix is having a strong day in the market today after reporting results for the third quarter. Not only were the quarter’s results positive, the company also released strong Q4 guidance. Here’s what we saw…

  • Earnings – In terms of earnings, NFLX had an overwhelmingly positive quarter. During the third quarter, analysts expected that the company would generate earnings in the amount of $0.06 per share. However, the company actually blew these expectations away, reporting earnings in the amount of $0.12 per share.
  • Revenue – Revenue also proved to be relatively positive for NFLX. During the third quarter, analysts expected that the company would produce revenue in the amount of $2.28 billion. However, the company actually reported revenue in the amount of $2.29 billion, also beating out expectations.
  • Growth In Users – One of the big concerns surrounding Netflix was their ability to continue growing users in a saturated market. However, they proved that they have what it takes. During the quarter, 370,000 new users signed up in the United States, beating analyst estimates of 310,000. On the international stage, the company brought in 3.2 million, beating expectations of 2 million.
  • Guidance – Finally, as mentioned above, NFLX produced strong guidance. In the fourth quarter, the company is expecting to generate earnings of $0.13 per share on revenue of $2.34 billion. Analysts are expecting to see $0.07 earnings on $2.4 billion in revenue.

What We’re Seeing From The Stock

As investors, one of the first things that we learn is that the news moves the market. When it comes to earnings, there are few things that have the ability to cause as much excitement. With earnings strong, Netflix investors are happy, pushing the stock upward. Currently (11:28), NFLX is trading at $118.80 per share after a gain of $19.00 per share or 19.04% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Netflix. When everyone was concerned about the $2 price hike, I was telling my readers to invest. If you did, you’re enjoying the fruits of your decision today. At the end of the day, NFLX is a great company with a great service. The company just took their services global about a year ago and has a wide open market to work in. All in all, this alone should lead to gains, let alone strong growth in the US, streaming Disney titles, and more. All in all, I believe that NFLX is headed up!

What Do You Think?

Where do you think NFLX is headed moving forward? Join the discussion in the comments below!