How to Read Netflix's Earnings Like an Intelligent Investor
Netflix (NASDAQ: NFLX) reported a huge first quarter, with net subscriber additions coming in at 15.77 million, more than double management's guidance. That boosted revenue by 27.6% year over year, while earnings per share doubled over the year-ago quarter to $1.57.
However, the stock is down since the news. It's been widely expected since March that streaming providers were seeing a massive spike in engagement, as people followed the stay-at-home advice to stop the spread of the COVID-19 pandemic.
But what is probably more disappointing for some is that management referred to this sharp acceleration in growth as temporary. In its quarterly letter to shareholders, management said, "We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon."
Source Fool.com
