Netflix Stock

771 Words2 Pages

The article that I have chosen for this week’s article presentation is from Forbes Magazine, “Should you Buy Netflix on Explosive Subscriber Growth”, by Peter Cohan. This particular article discusses the positives and negatives of buying Netflix stock during the tremendous growth it is currently experiencing. Cohan begins his article by stating just how volatile Netflix stock has been over the past few months. In July of this year, the stock price had plummeted to just above $85. Now, just a few months later, it is trading at almost $120. According to Cohan, one should buy Netflix stock when Netflix fails to reach their intended subscriber growth and sell Netflix stock when they surpass subscriber expectations. He reasons that forecasting Netflix stock is extremely difficult since one has to determine what shows will be huge hits …show more content…

In the third quarter, Netflix beat analysts’ expectations for new subscribers by 50% due to its widely successful new show, “Stranger Things”. Further, Cohan also points out how Netflix’s global expansion efforts have played a large role in their stock’s recent success. Netflix has expanded into 130 new countries, including China, and this has dramatically increased subscriber growth. Netflix has been able to maintain profits while simultaneously reinvesting in its own programs. This has resulted in investor’s desire for the stock to be at an all-time high. In the fourth quarter, Netflix is projecting that it will again surpass subscriber growth expectations in both the US and abroad. This past year, the company’s revenue rose from $1.74 Billion to $2.29 Billion. Also, their net income rose from $29.4 million to $51.5 million. As a result, EPS increased by 12 cents and analysts are currently projecting it to rise another 13 cents this quarter. Cohan concludes his article by once again stating just how unpredictable this stock is yet, investing at the next dip may just be a great

More about Netflix Stock

Open Document