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What Factors Impact Netflix’s Stock Price?


Nov. 30 2016, Published 4:57 p.m. ET

The rise in Netflix stock

On November 29, 2016, Netflix (NFLX) stock closed at $117.51. In the past month, it has fallen 7.2%, but so far this year, it has risen 2.7%.

In contrast, 21st Century Fox (FOXA) has seen its YTD (year-to-date) stock price rise 4.8%, while The Walt Disney Company (DIS) has seen its YTD price fall 5.2%. Time Warner (TWX) stock has risen 43.7% YTD, as you can see in the graph above.

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Factors driving the rise in NFLX stock

In Netflix’s recent fiscal 3Q16 results, the company had total streaming revenue of $2.2 billion in 3Q16, up 36.5% year-over-year. Netflix had a contribution margin of 18.8% in 3Q16, and total streaming memberships of 86.7 million at the end of 3Q16.

The company had net additions of 3.6 million members at the end of 3Q16. The strong net additions in the third quarter exceeded the company’s internal forecast of 2.3 million additions of streaming members.

In this series

In this series, we’ll look at the steps Netflix has undertaken in the domestic market to shore up its US subscribers and whether these steps will be sufficient. We’ll also look at its capital structure and some factors that could impact its domestic markets. Finally, we’ll look at the company’s technical indicators. Let’s start by looking at analysts’ recommendations and target prices for the company.


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