Will Netflix, Inc. (NASDAQ:NFLX) Continue To Rule?

Posted by Lynn Eisler January 24, 2014 0 Comment 1090 views

Shrugging off all the concerns apart, Netflix, Inc. (NASDAQ: NFLX) was in a complete upbeat in yesterday’s trading. The stock prices soared by as much as 16.50%, recording a fantastic gain of $55 per share and closing at $388.72. This thunderous show of optimism came as a result of the better than expected earnings reported by the company. Apart from this, the news that caught immediate attention is the sweeping growth in its number of subscribers. In the United States alone, the entertainment company reported a growth of 2.3 million subscribers during the fourth quarter. Equally pleasing was its 1.7 million subscriber addition, overseas, which now makes its total subscription numbers overseas to swing beyond a 10 million level. For the first quarter now, Netflix estimates a 2.25 million addition to its U.S. subscribers base and more 1.6 million international subscribers.

The Best Is Yet To Come

As the fourth quarter results came out, Netflix walked out with a clear winning trophy as it surpassed the market estimates in all aspects. Be its earnings per share, revenues or the subscriber data, the company has moved far and beyond an average business entity. The earnings at 79 cents per share, was decently beyond the market’s target of 66 cents per share. Comparing it with its own numbers in the previous year, the growth was six fold. As the Winter sets in, the company is expected to give another stunning performance during this time, which is considered as its one of the peak season.

Valuations Are High

Netflix is undoubtedly a leader in the video-streaming industry. The company has transited impressively from the mail-order DVD’s to the streaming business, giving nightmares to the prominent traditional cable and satellite providers. The only glitch that remains is the current pricing of the company, which seems to be excessively overvalued as of now.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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