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NEW YORK (dpa-AFX) – Surprisingly good viewer growth made Netflix shareholders more amicable on Wednesday. The streaming service’s titles rose by more than six percent to around $ 214 before its launch. This would be based on the good development of the last three trading days and could leave a resistance around $ 200 a bit more clearly.
Since the beginning of the year, based on the previous day’s closing rate, the price has continued to decline by around two-thirds. This makes the stocks one of the biggest losers on the NASDAQ 100 Index, which lost a quarter over the same period.
Thanks to blockbuster shows like Stranger Things, Netflix didn’t do as badly as it was feared in the second quarter. Although the number of paid user accounts dropped by 970,000, the company itself expected two million subscriptions to be lost.
However, Netflix struggled in its well-established markets that were characterized by increased competition. The titles of the entertainment giant Disney (Walt Disney), which has long since launched its own streaming service from Disney +, went up a good 1.5 percent ahead of the market. Amazon, whose top customers can enjoy streaming from the world’s largest online retailer, is another major rival to Netflix, as is the Home Box Office (HBO) with its Max streaming platform.
Overall, Netflix exceeded very low expectations, and also sounded more optimistic at the data conference than it did after the first quarter, stressed Andrew Uerkwitz from analyst house Jefferies. However, sales have suffered from the strong US dollar and are just below consensus.
The outlook for the current quarter remains cautious: while Netflix is expecting an increase again with around one million new users, it will fall short of expectations. For example, Goldman expert Eric Sheridan expected a user growth of 2.3 million, and John Hodulik of Swiss UBS by at least 1.2 million. Contrary to the previous quarter, this is still growth, albeit very modest, wrote his colleague Doug Anmuth of JPMorgan Bank.
More important than expected are the better-than-expected cash inflow outlook (FCF) and initiatives to cheaper version of its own streaming service with ad clips and preventing multiple use of accounts, Anmuth continued. Sheridan, a Goldman expert, also believes that the success of these two initiatives is critical to the long-term improvement in equity price developments. The company will continue to be judged on whether it can stand up to increasing competition.
In a video interview, Netflix managers avoided questions about how high they think the percentage of users in the cheaper, ad-supported version could be. UBS analyst Hodulik believes it will take some time to solidify. Operating margins are likely to stagnate in the coming year due to development initiatives and increased pressure from a strong dollar, as well as restructuring efforts within the group.
Netflix has been a favorite of investors for years. The stocks of the streaming pioneer, which were further boosted by the crown pandemic, hit a record high of just over $ 700 in November 2021. Late last year, the price began to fall as a result of the general weakness of tech stocks which rose sharply. In early 2022, Netflix’s price dropped after disappointing subscriber outlook.
Another major setback came in April: With Netflix, the first quarter was the first quarter in which customer numbers had fallen in more than a decade. On April 20 alone, it lost more than a third of its share. It has stabilized in the $ 160- $ 200 range since May, but has not yet experienced a lasting recovery.
After falling prices in the past few months, Netflix currently only goes public about $ 90 billion. In November, it was over 311 billion. / Gl / ck / mis
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