I received numerous emails last week to share my take on NFLX, after the stock took a 20% plunge post earnings, hence this update. Is this the first time that we have seen this with NFLX?
Unfortunately, for high growth companies like Netflix, there is no margin for error. The biggest cause of this reaction was possibly because it missed its own guidance on membership growth (besides missing out on revenue expectations).
I believe that concerns around the price hike last quarter will be short-term and that NFLX may still be far from reaching a saturation point. Room for international growth is still immense, and our original thesis on NFLX is still intact. We are sitting tight on massive profits of 225% and 175% on our 2 positions even after the decline, and continue to Hold them both.
Stay tuned as our next recommendation is coming soon!