Netflix NEWS

 


Subscriber Growth, Already Much Slower Netflix released 2Q21 financials after markets closed on Tuesday and told investors it sees no need to expand, although competition is growing and many media are joining to create more powerful entertainment platforms. The company's revenue grew in 2Q21 to $ 7.34 billion from $ 6.15 billion a year earlier, while analysts surveyed by FactSet expected $ 7.32 billion. Netflix's profit for 2Q21 almost doubled and reached $ 1.35 billion (or $ 2.97 per share), but was below market expectations ($ 3.18 / share). Netflix shares were down 1% after the close. Netflix increased its subscribers by 1.5 million in the reporting period, beating the company's previous forecast of 1 million new subscribers. However, the growth rate of subscribers has noticeably slowed down (recall that the company gained 10 million subscribers in 2Q20 when most of the world was at home). The Asia-Pacific region, which accounted for, showed the best dynamics in calls of subscriber growth, almost 70% of 1.5 million new subscribers. In the US and Canada, the number of Netflix subscribers for the first time since 2Q19 decreased by 400,000. The company's subscriber base reached 209.2 million subscribers worldwide. Commentary Netflix's approach to mergers and acquisitions is the opposite of the rest of the entertainment industry, which is experiencing a deal-making boom hoping to challenge Netflix. In this, we see the advantages of the strategy, since many M&A deals in the industry have taken place and will still take place at inflated prices. But keep in mind that competition among streaming services is still intensifying because of the consolidation of other players, and in this context, the most important thing to fear is the growth of Disney +. Overall, the results were above our expectations in terms of both revenues and earnings, so we raise the fair value of one Netflix share from $ 586 to $ 620, but we remain neutral in our long-term outlook for the company - upside potential is only 17% from current price levels.

 

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