Netflix (NFLX) released financial results for the first quarter that disappointed investors. The company announced it has a decline in new subscribers. Revenue was $ 7.16 billion, while earnings per share were $ 3.76. Analysts at Refinitiv expected $ 2.97 per share and revenue of $ 7.13 billion.
Netflix announced 3.98 million new subscribers last month, a big disappointment for FactSet analysts looking for a number in the vicinity of 6.2 million. The numbers on Wall Street have not pleased them, and NFLX stock has plummeted.
Analysts have not been surprised at the sharp fall in the park despite these records of rapid decline. An analyst at IG suggests that investors’ most significant worry is that this giant of the domestic leisure industry won’t maintain the spectacular organic growth numbers of new affiliates in an environment of increasing competition.
They are pronounced similarly from Swissquote, whose analyst Ipek Ozkardeskaya suggests that these risks are likely to hurt Netflix’s business in combination with increasingly high subscription rates.
The company’s shares experienced losses of 11% in electronic trading, with the share price falling below $ 500.
Due to the extensive distribution of Covid-19 in 2020 and progressively narrower content in the first half of this year due to production delays due to the coronavirus, Netflix believes that the increase in subscription payments has slowed.
Netflix’s revenue increased 24% year-on-year and was in line with forecasts for the beginning of the quarter.
Researchers forecast Netflix (NFLX)’s earnings per share to reach $2.7 next quarter, $2.47 the quarter after that, and $12.99 by 2022. Analysts expect the lowest earnings-per-share estimate for the quarter to be $2.08, while the highest estimate for EPS is $3.89. In the current quarter, EPS was $1.59, while it was $0.99 a year ago. It is expected that earnings per share for the fiscal year will grow by 52.9% and 30.95% over the next financial year, increasing at an annualized rate of 44.43% over the next five years compared to 83.80% in the past five years.