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How Did Netflix Stock Fare in April?

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Netflix stock returns

Streaming heavyweight Netflix (NFLX) rose over 3.9% in April. The stock is currently trading at $379.06, which is 64% above its 52-week low of $231.23 and 10% below its 52-week high of $423.21. The stock has gained over 2% in May 2019 as well.

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Growth in paying subscribers key for Netflix

Netflix has just less than 150 million paying subscribers. The company had forecast an additional 14.6 million paying subscribers in the first six months of this year. It managed to add 9.6 million paying subscribers in the first quarter and now needs to add an additional 5.0 million in the second quarter to meet its target. Netflix ended 2018 with 139.3 million paying customers. It added a significant 28.6 million subscribers last year.

How Will Disney’s entry into streaming impact Netflix?

Disney’s (DIS) subscription streaming service, which is called Disney Plus, is expected to launch in November this year. The company claimed that the subscription cost will be around half of Netflix’s standard subscription plan. Disney already has a staggering portfolio of content to leverage. It will also pull its shows from other streaming platforms over the next few months.

Apple’s (AAPL) subscription service, known as Apple TV Plus, is all set to launch later this year as well. Apple and Disney are way bigger than Netflix and can pump in billions of dollars to advertise and market their content to potential viewers.

Netflix though remains unconcerned about this competition, as it expects the streaming market to be big enough for multiple players. The key to Netflix’s international growth has been the production of original content to attract regional viewers. Netflix still has enough and more growth potential in emerging markets (EEM) as purchasing power from the middle class continues to grow in these geographies.

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