Netflix Shares Rose 28.6% Last Month, But the Stock Is Still Cheap
Shares of Netflix (NASDAQ: NFLX) gained 28.6% in July, according to data from S&P Global Market Intelligence. After two disappointing earnings reports and a gloomy first half of the year, the digital-video veteran presented a rosier picture of its subscriber growth trends in July's second-quarter update. Investors were quick to embrace that bullish morsel, sparking several days of rising share prices.
Netflix's subscriber count fell in two straight quarters, including a loss of 1 million accounts in the second-quarter report. Management signaled an end to that downtrend, forecasting the third-quarter figure to hit an all-time high of 221.67 million global paid memberships.
At the same time, the second-quarter results were a mixed bag. Earnings came in above expectations but revenue fell slightly short of guidance and analyst estimates. Furthermore, revenue growth should continue to slow down in the third quarter as the year-over-year growth rate drops to roughly 4.7%, down from 8.6% in the second quarter.
Source Fool.com
