Are Netflix Bears Looking at the Wrong Numbers?
Netflix (NASDAQ: NFLX) skeptics had a field day with January's fourth-quarter report. Customer growth came in just below management's guidance and the official user-growth projections for the next quarter were downright disappointing. The stock plummeted 21% lower the next day as the bears finally found some hard data to chew on.
However, the Netflix worriers are laser-focused on the wrong data point. Let me explain.
The management team said as much in the fourth-quarter earnings call. Co-CEO Reed Hastings noted that the quarter was healthy due to higher viewer engagement and lower subscriber churn. CFO Spencer Neumann pointed out that Netflix is adding customers even in this lull, just at a slower pace than usual. Overall, Netflix's leaders tried to steer the discussion in a more productive direction, but the effort was in vain.
Source Fool.com
