Netflix Is On Fire: Here’s Why

Netflix Is On Fire: Here’s Why
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Recently, Netflix released the financial reports for its second quarter and their performance was brilliant, to say the least. The streaming giant added 5.2 million new users and increased revenues by $66 million in just 3 months.

Seeing such massive success, Wall Street analysts were surprised and applauded the company’s ability to be able to draw new customers even after years of being in business.

As a result of this announcement, the company stocks surged 10%, hitting an all-time high.

“We believe the rapidly growing content offering, led by originals that in aggregate garnered 91 Emmy nominations last week, drove the stronger new sign-ups,” wrote Morgan Stanley analyst Benjamin Swinburne in a note to clients.

Original content has been one of the key factors behind the massive success. Netflix boasts of hits like “Stranger Things,” “The Crown,” and “13 Reasons Why” that enticed new Netflix subscriptions. Netflix shows collectively bagged 91 Emmy nominations this year.

“We believe this may have been NFLX’s strongest content quarter ever,” wrote J.P. Morgan analyst Doug Anmuth, adding that the company’s “virtuous circle” of creating new content and seeing new users sign up has continued.

Netflix is forecasting that it will add 4.4 million new subscribers in the third quarter, consisting of 750,000 U.S. subscribers and 3.65 million international subscribers.

“Given the high correlation between content and subscriber growth and the content slate in 3Q, we expect subscriber outperformance to continue,” wrote Goldman Sachs analyst Heath Terry, who referred to the entertainment company’s platform as “unmatched”.

Netflix shares have easily outperformed the market as investors pile in and the stock is up 63% in the last year.

“While we remain positive in the long-term fundamental outlook of the business, including its ability to disrupt the traditional incumbents and grow international, our analysis also suggests that the current price already reflects this view,” wrote Citi analyst Mark May.

Megha Shah for TechFunnel.com


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Megha Shah
Megha Shah
A dreamer, traveler, aspiring entrepreneur and a bookworm beyond repair, Megha Shah is extremely fond of writing and has been doing so since she was a child. Apart from being a part-time writer, Megha is currently in college, pursuing B. Com. (Hons). Megha is an ardent follower of ‘Hardship, Hustle and Heart’ and firmly believes in the power of hard work and destiny!

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