NFLX Stock Jumps 17% after Netflix Reports Better Than Anticipated Q4 Results

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by Steve Muchoki · 3 min read
NFLX Stock Jumps 17% after Netflix Reports Better Than Anticipated Q4 Results
Photo: Netflix

Netflix recorded revenue of $6.64 billion in the past three months versus Wall Street estimates of $6.63 billion and Netflix’s forecast of $6.57 billion.

Netflix Inc (NASDAQ: NFLX) stock popped 16.85% on Wednesday to close the day trading at $586.34. The surge is largely attributed to the better than anticipated Q4 earnings results revealed by Netflix.

The mega tech company reported having added more subscribers than anticipated during the past three months. Notably, Netflix is said to have added 37 million paid subscribers in 2020. The huge flow of subscribers was made possible by more people who have resulted in staying at home to avoid contracting the coronavirus.

Netflix stock investors saw their portfolio up more than 67% last year. Besides, Netflix stocks have jumped approximately 20.84% in the past three months. The volatility has spiked further in the past month, whereby Netflix stock has jumped approximately 14.08% and 17.07% in the past one month and five days respectively.

At the height of the pandemic, Netflix has heavily capitalized on quality delivery of content despite the coronavirus crisis. Previously, the company increased the subscription prices to much the delivery content. Interestingly, Netflix has continued to see a spike in paid subscribers as recorded in the Q4 results.

Market data provided by MarketWatch indicates Netflix has a reported market valuation of approximately $221.68 billion with 441.8 million outstanding shares. Netflix stock has been regarded as a stay-at-home stock and may continue to benefit so long as the pandemic remains a direct threat to our normalcy.

Notably, having been rated 41 times previously, Netflix stock received an average of Over rating. This comes as the company continues to experience more competition from other streaming providers both locally and overseas. Some of the notable Netflix competitors include Hulu, Disney Plus, Amazon‘s Prime Video, and HBO Max.

Netflix stock volatility is likely to continue up until the time a viable coronavirus vaccine is approved and a significant portion of the population is vaccinated. In the meantime, both investors and analysts remain optimistic about Netflix stock in the coming quarters.

Netflix Stock and Q4 Results

The majority of the recent gains in Netflix stock have been fueled by the growing demand for Netflix services. According to the company, Netflix’s original show “Bridgerton,” produced by “Grey’s Anatomy” creator Shonda Rhime recorded a huge viewership. Other shows that saw record views included “Stranger Things”, “The Witcher”, “The Midnight Sky” and also the “The Queen’s Gambit”.

Hereby, Netflix recorded revenue of $6.64 billion in the past three months, versus Wall Street estimates of $6.63 billion and Netflix’s forecast of $6.57 billion. During the past three months, Netflix earnings per share were $1.19, versus Wall Street estimates of $1.39 and Netflix’s forecast of $1.35. On the side of global paid subscribers, Netflix recorded 8.51 million, versus Wall Street estimates of 6.03 million and Netflix’s forecast of 6 million.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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