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Netflix Murders Estimates!

posted Feb 8, 2012, 11:51 PM by Mohit Kumar
Our terrific run continues as our stocks continue to thrash estimates!

The much anticipated earnings of Netflix turned out to be more than a pleasant surprise, as the stock surged nearly 25%!! Congratulations!!!


Revenue:   Expected: 857M, Delivered: 875M
Earnings:   Expected: $.56,  Delivered: $.73

Excellent!!!

More importantly, Netflix reported a resumption in the growth of domestic subscribers indicating that the worst may have gone behind.
There seems to be more clarity about its future plans and this gives me more confidence. Netflix is pretty much on the track I was hoping it will take and our decision to stick with it in spite a massive thumping, is paying us huge dividends now!! Refer to the previous analysis for a quick recap:

NFLX bleeding Red?

However, the journey may still not be all that rosy. A stiff competition and plans for international expansion will put pressure on cash flow in the short term. The stock is likely to remain volatile for quite sometime before the stock takes an affirmative direction! I see no reason to give up on Netflix at the moment, and we continue to love it for the time being! Congrats again to those who had the courage to stay alongside me for Netflix and are reaping the benefits now!

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