Netflix, Inc. (NASDAQ: NFLX)
Netflix is having an incredibly hard time in the market as of late, and for good reason. The company released a statistic with its most recent earnings report, putting fear in the minds of investors. Today, we’ll talk about what we saw from the earnings report, what we’re seeing from the stock at the moment, and what we can expect to see from NFLX moving forward.
NFLX Scares Investors
As mentioned above, Netflix recently reported its earnings for the most recent quarter. In reality, the earnings report really wasn’t all that bad. When it comes to revenue, the company posted a slight miss, producing $1.96 billion while analysts expected to see $1.97 billion. In terms of earnings, the company actually came in ahead of expectations by 50%, producing a profit of $0.06 per share.
That all looks great, but what’s the bad news… right? Well, the bad news is international growth. During the earnings report previous to the most recent report, NFLX announced that it would be taking its company global. On the day of earnings, the company opened its services up to more than 130 countries worldwide. Of course, this was overwhelmingly positive news. After all, with what the company has done with a relatively small audience in mind, investors expected to see sales climb in a big way once the company went global.
Unfortunately, that didn’t happen. While the company did see international sales that jumped into the hundreds of millions of dollars, these sales fell short of expectations in a big way. Unfortunately, the company doesn’t seem to have the ability to sell its services internationally at the volume investors wanted to see, and that’s producing a real scare.
What We’re Seeing In The Market
As investors, one of the first things that we learn is that the news moves the market. Any time there is positive news released with regard to a publicly traded company, we can expect to see gains in the value of the company as a result. Adversely, when negative news is released with regard to a publicly traded company, we can expect to see declines. With that said, since NFLX released its earnings report, we’ve seen quite a bit of downward movement on the stock. Unfortunately, that bearish movement is continuing today. Currently (12:33), NFLX is trading at $92.97 per share after a loss of $2.93 per share or 3.06% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have a mixed opinion of what we can expect to see from Netflix. Unfortunately, the stock is likely to see further declines in the short term as concerns with regard to international sales continue to weigh heavy on the minds of investors. However, in the long run, I have relatively high hopes for the stock. The reality is that few products jump off of the shelves as soon as they are launched. When it comes down to it, NFLX took quite a while to build up momentum in the Untied States, and it’s going to take some time for the company to build momentum internationally. However, the services provided by the company are top notch, and they come at a relatively low price. As a result, I’m expecting to see international sales soar in the long run, leading to long run gains for NFLX.
What Do You Think?
Where do you think NFLX is headed moving forward and why? Let us know your opinion in the comments below!