Why Netflix Stock Might Be Interesting For Tech Investors?
After Netflix posted subscriber numbers that crushed its own guidance and went above Wall Street's expectations, the company's shares went up as much as 9 percent in late trading on Wednesday, Jan. 19.
Netflix Stock Increase
According to CNBC, in extended trade on Wednesday, Netflix stock was last seen about 8 percent higher, at a value near $144, as more than 3 million shares were traded in the session. This happened after the company announced 7.05 million new subscribers added during the fiscal fourth quarter. That figure was the largest-ever quarterly subscriber growth in its history, being also well above company's own expectations of 5.2 million.
Netflix added for the quarter 5.12 million memberships internationally and 1.93 million subscribers in the U.S. Those figures came in well above the company's own forecast that it would add 3.75 million subscribers internationally and 1.45 million subscribers in the U.S. Market analysts also expected Netflix membership numbers to come in slightly below those levels, about 3.73 million internationally and 1.44 million in the U.S.
According to Fortune, this is only the latest Netflix stock value increase. For the last several years, company's stock has been high. Market analysts are expecting the investor binge to continue after the company has announced better-than-expected earnings.
Investing in Netflix stock
Some shareholders are wondering whether the stock's skyrocketing valuations could represent a signal of an eventual tumble to follow in the near future. According to market experts, this is highly improbable, since the company has a solid revenue increase as well. According to company's data, Netflix has a 41 percent revenue increase over the year-earlier quarter for the fourth quarter of 2016. For all of 2016, Netflix reported $8.3 billion in streaming revenue. That represents an increase of 35 percent from 2015.
Netflix stock has risen almost 650 percent over the past five years. This is more than six times as much as the Nasdaq and more than nine times as much as the S&P 500. Netflix stock has been relatively volatile, suffering high-profile swings and occasionally big dips. However, Netflix has climbed and the overall trend has been positive,
Company's price-to-earnings ratio has become very interesting. Wednesday, at market close, the stock's price sat at 140 times expected 2017 earnings and 356 times trailing earnings. That can only indicate the fact that investors have a strong belief in Netflix's future earning potential.
This interesting market conjuncture for the company can be explained in part by Netflix's rapid current growth. As the company comes closer to reaching a saturation point in the States, international expansion is key to the plans for the future. According to data released by the company, 47 percent of its subscribers are now outside the U.S.
Another reason Netflix's price-to-earnings ratio is so high is that, especially in comparison with other tech companies, its profits are pretty low. This is due in part to the fact that Netflix's growth strategy based on enormous amounts of original content and rapid international expansion is very costly.
Investors in company's stock bet on the fact that Netflix subscribers and company's revenues may start soon growing much faster than its programming costs. This could be a realistic bet, since the main competing streaming video services, such HBO Now, Hulu and Amazon Prime lack the share in the global media market that Netflix has.
Netflix App On Smartphone Gets Stream-Speed Control
Netflix mobile video streaming service includes now a speed control feature.
FCC Changes Its Initial Cable Box Plan In Favor Of Pushing Cable Companies Develop New Apps
The Federal Communications Commission redesigns its cable box plan.
Roku's New Streaming Boxes Lineup Makes 4K As Low As $30
Roku just launched its new lineup of streaming boxes.
‘Stranger Things’ Season 2 Will Not Resurrect Barb, Showrunner Confirms
Executive producer Shawn Levy of "Stranger Things" has revealed that Barb won't be coming back to the Netflix show and explained why.
'Luke Cage' Season 2 Aims For 2018 Release; Filming Starts As New Still Photos Revealed
Marvel and Netflix series "Luke Cage" has finally began filming for the second season and new teasers featuring Mike Colter and Rosario Dawson have been released.
MORE IN ITECHPOST
Spyic Review: The Best WhatsApp Spy AppYou Can’t Miss
WhatsApp is the evergreen chatting app that is used by one and all. Spying on someone’s WhatsApp messages is not really a task in this age of tech-savvy world. Today, we have advanced apps with super cool features that can help us hack the entire phone. To ensure kids' safety or keep an eye on your employees, concerned parents and employers are always on the lookout for a decent spying app. We have the best in store for you. This article will tell you all about the best WhatsApp spy app there is. If you’re curious to read someone’s chat on WhatsApp, you need to get the hang of one true app. For more information on this, check out the Clickfree post now. Looking for a utility tool to spy on someone’s WhatsApp? We want to introduce you to the best whatsapp spying app - Spyic. This is a definitive parental control and remote monitoring app that will keep your children safe, your spouses in check and your employees to work! Being one of the most popular social media apps, it wouldn’t just reveal the content to you. That’s why Spyic is the best WhatsApp Spy App that you can’t miss.
How Do Personal Emergency Response Systems Work?
Personal emergency response systems, known as PERS for short, are systems that help people to raise the alarm and get immediate help when a medical or personal emergency occurs. They are ideal for older people and anyone with a mobility issue or an injury or illness that can cause falls.
Game Developers’ Different Roles in the Studio
Learn about the different professionals involved in developing video games. Becoming a game developer is one of the coolest jobs around and your 14-year-old self, perched on the edge of your bed as you play PlayStation, will thank you for making such an awesome career move.
Surviving Your First Year of College
You Did It! You’re Off to College! Congratulations! You have finished high school and are off to college. The sense of accomplishment is overwhelming, and you have not even graduated yet! However, beware of the pitfalls. The allure of going to college is often associated with one word—freedom. You are leaving home to be on your own. You can have all the friends you want, stay up as late as you want, and perhaps spend as much money as you want. If you keep your head, you can avoid the problems associated with college life.