uploads///NFLX YTD price perf April

Why Netflix Is Stopping Short of an All-Time High


Dec. 4 2020, Updated 10:53 a.m. ET

The rise in Netflix stock

On April 10, 2017, Netflix (NFLX) stock closed at $143.85. In the past month, it has risen 2.1% and so far this year, it has risen 16.2%.

In contrast, 21st Century Fox (FOXA) has seen its YTD (year-to-date) stock price rise 11.4%. The Walt Disney Company (DIS) has seen its YTD price rise 7.9%. Time Warner (TWX) stock has risen 2.2% YTD, as you can see in the chart below.

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Factors driving the rise in NFLX stock

Netflix (NFLX) is expected to announce its 1Q17 results on April 17, 2017. Equity research houses R.W. Baird and Pacific Crest Securities are cautious about Netflix. We’ll discuss the reasons behind this cautious stance in detail later in this series.

In Netflix’s 4Q16 results, the company had total streaming revenues of $2.4 billion, up 41% year-over-year. Netflix had a contribution margin of 20% in 4Q16 and 93.8 million streaming memberships at the end of the quarter.

The company had net additions of 7.1 million members at the end of 4Q16. The number of net additions exceeded its internal forecast of 5.2 million.

Series overview

In this series, we’ll look at the outlook for Netflix in fiscal 1Q17 in its domestic and international markets. We’ll also look at the company’s competition in the United States (SPY) and how Amazon’s (AMZN) foray into sports programming could change the playing field for Netflix.

Finally, we’ll review the company’s valuation metrics. Let’s start by looking at analysts’ recommendations and target prices for the company.


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