Netflix (NASDAQ:NFLX)
On Wednesday morning, Netflix (NASDAQ:NFLX) stock jumped almost 10% after the streaming TV giant reported third-quarter numbers that beat forecasts and issued a projection for subscriber growth that indicated its recent difficulties might be gone.
Late on Tuesday, Netflix (NASDAQ:NFLX) said it had gained 2.41 million net customers during its third quarter, bringing its total number of global users to 223.09 million. Also, it seems like things are looking up for Netflix stock, as the company forecasts adding 4.5M new users in the fourth quarter.
Co-CEO of Netflix (NASDAQ:NFLX) Reed Hastings was candid about how he felt about the company’s recent subscriber growth and future prospects.
It’s “a significant thing to get back to the positive,” Hastings said on Netflix’s (NFLX) earnings call, thanking God for the end of the company’s “shrinking quarters.”
Wall Street welcomed Netflix (NASDAQ:NFLX) quarterly report and business forecast. Analyst Steven Cahall of Wells Fargo, who covers Netflix stock and has an equal weight rating and a $300 price target, recently said that the firm seems to have passed through its “dark days” and that the worst may be over.
While there will always be ebbs and flows in the slate, it is now challenging to anticipate [subscriber] loss in coming years, according to Cahall. “Netflix was un-ownable when net additions went negative.”
Cahill noted that churn (the loss of customers) is still possible. Cahall claims that “it’s challenging to picture Netflix as a negative net [subscriber acquisition] story again in the near future” since the company plans to provide an ad-supported subscription option in the near future, followed by paid sharing initiatives in 2023.
As Netflix (NASDAQ:NFLX) develops into a more diversified corporation, Cahall says it will become a more stable “stock.”
After the results were announced, Doug Anmuth, an analyst at JPMorgan, upgraded Netflix stock to overweight from neutral and increased his price objective to $330 from $240. Thanks to the monetization of account sharing and the ad-supported tier, Anmuth has “greater confidence” that the firm can speed up revenue development.
Anmuth said, “We are excited that Basic With Ads unit economics should be at least neutral across all geographies, and we think notably accretive in big ad markets such as the U.S.”
Following the second half of season four of Netflix’s (NFLX) two most famous English shows, Stranger Things and Monster: The Jeffrey Dahmer Story, Anmuth said the firm “may be getting back on track in terms of content consistency.”
According to Nat Schindler, an analyst at Bank of America with an underperforming rating and a $196 per share price target on Netflix stock, the fourth season of Stranger Things helped drive growth in net subscribers across all regions from the previous quarter. Netflix still relies heavily on successful programming to fuel expansion.
With the staggered release of Stranger Things, “our past worries of Netflix becoming substantially more hit-driven have all but come to true,” Schindler said. To paraphrase, “We believe Netflix has few high-impact original series for [the fourth quarter].”
Netflix stock streaming media competitors rose in response to the news, aided in part by Netflix stock’s significant growth.
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Investors are optimistic again about Netflix stock after a 10% increase in share price and the return on subscription growth.
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Author Shariq Khan 
