Netflix stock (NYSE:NFLX) rose substantially on Wednesday, jumping as much as 15.9%. The stock was still up 15.5% as of 10:37 a.m. ET.
The company’s financial reports, which included excellent news on numerous fronts, were the impetus that propelled the streaming pioneer higher.
So, what’s the deal with Netflix Stock?
Netflix announced positive subscriber growth in the third quarter, much to the pleasure of shareholders, following two straight quarters of decreases. Perhaps more crucially, it did it in grand style, with 2.4 million net additions, well surpassing its own projection – and Wall Street’s – of 1 million new customers. “Thank God, we’re done with declining quarters,” stated co-founder and co-CEO Reed Hastings on the earnings call.
Netflix’s revenue was $7.9 billion, a 5.9% increase yearly. Revenue increased by 13% when exchange rates were excluded. The company’s profits per share (EPS) of $3.10 were somewhat lower due to currency problems.
However, both figures are considerably above analysts’ forecasts, with sales of $7.8 billion and earnings per share of $2.14 expected.
So, what now?
Netflix executives went into extensive detail about the company’s planned ad-supported service. The “basic with advertisements” option will be available in 12 countries beginning Nov. 3 and will cost $6.99 per month. The service will offer four to five minutes of advertising every hour, with adverts ranging in duration from 15 to 30 seconds. The cost is also $1 cheaper than rival ad-supported services such as Disney+ and Hulu.
“Our basic with advertisements tier will let us offer up Netflix to a whole new audience of consumers who are drawn to all that wonderful content at an even lower price point,” said co-CEO Ted Sarandos. According to Chief Operating Officer Greg Peters, the tier will “bring in a lot more people, and we’re fairly sure in the long run that this will lead to a large additional income and profit stream.”
With megahits like Stranger Things 4, Monster: The Jeffrey Dahmer Story, and The Gray Man, Netflix has once again shown its capacity to overcome hardship. That is why Netflix stock (NYSE:NFLX) is a good investment.
Featured Image – Megapixl © Twindesign
Author Okoro Chinedu 
