Is Netflix Stock a Buy After Shares Jump 7% on Subscriber Number Surprise?
This year has been tough for Netflix (NASDAQ: NFLX) investors. In the first quarter, after announcing its first subscriber loss in more than a decade, the stock shed a third of its value overnight. To make matters worse, Netflix management predicted more pain to come and forecast the loss of an additional 2 million paid subscribers. In the wake of that surprisingly weak showing, Netflix stock fell as much as 77% from its high reached last year.
It appears there's light at the end of the tunnel -- and it may not be a train. All eyes were on Netflix's subscriber numbers when the company reported its second-quarter results Tuesday after the market close -- which were far better than expected. In the wake of this whipsaw performance, is Netflix stock a buy?
By a wide variety of metrics, Netflix's growth was stronger than investors had expected. The company generated second-quarter revenue of $7.97 billion, up 8.6% year over year, just missing analysts' consensus estimates of $8 billion. That requires context, however, as the strong dollar obscured growth that would have climbed 13% if not for exchange rate headwinds. Profits were also robust, with earnings per share (EPS) of $3.20, easily eclipsing the $2.95 expected by investors.
Source Fool.com
