What Factors Are Affecting Netflix’s Stock Price?



The rise in Netflix’s stock

On December 7, 2016, Netflix’s (NFLX) stock closed at $125.39. In the past month, it’s risen 0.7%. So far this year, it’s risen 7.8%.

In contrast, 21st Century Fox (FOXA) has seen its YTD (year-to-date) stock price rise 5.2%, while The Walt Disney Company (DIS) has seen its YTD price fall 2%. Time Warner’s (TWX) stock has risen 46% YTD, as we can see in the graph above.

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Factors driving the rise in NFLX

In Netflix’s recent 3Q16 results, the company had total streaming revenue of $2.2 billion in 3Q16, a rise of 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. Its strong net additions in the third quarter exceeded its internal forecast of 2.3 million streaming member additions.

In this series…

In this series, we’ll look at Netflix’s international streaming market. We’ll look at its pricing strategy in international territories and the outlook for its net international additions. Finally, we’ll look at the company’s technical indicators and valuation metrics. 

Let’s start by looking at analysts’ recommendations and target prices for Netflix.


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