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Full stream ahead for Netflix as House of Cards returns

The schemes of a ruthless despot with his sights set on the Oval Office have allowed one company to expand into just about every market across the globe.
Full stream ahead for Netflix as House of Cards returns
He's back...

The schemes of a ruthless despot with his sights set on the Oval Office have allowed one company to expand into just about every market across the globe.

It’s Netflix (NASDAQ:NFLX) and the return of Frank Underwood of course.

The Machiavellian President of the United States darkened screens once more on Friday, as Netflix’s award-winning ‘House of Cards’ returned for season four.

In a surge worthy of Underwood himself, stock was up 4% on Friday and above $100 for the first time since January, trading at 390 times this year’s earnings estimates.

The company’s success has been attributed to its diverse and original line-up of shows, including ‘Orange is the New Black’, ‘Narcos’ and ‘Making a Murderer’, cult hits that are dominating social media and even real life chat right now.

Last year, Netflix was responsible for more than half of an overall 3% drop in TV viewing in the US and was the best performing stock in the S&P 500 last year after it more than doubled.

But given its size, that sort of performance is unlikely to happen again and despite its recent rally, shares are still down 12% in 2016.

Analysts at MoffettNathanson said that weak EPS and falling net income risks countering its robust revenue growth and stock performance.

But forget earnings and revenue, it’s all about subscribers in Wall Street at the moment.

"There’s no better way to overpower a trickle of doubt than with a flood of naked truth,” as Underwood would say.

Subscriber growth bedazzled investors earlier this year allowing the company to dip its fingers into almost every market in the world.

Last month, Netflix tallied more than 75mln subscribers globally. That’s more than double the population of Canada.

Analysts predict 82mln subscribers by the first quarter and 96mln by the end of the year.

Wall Street predicts a subscriber count of nearly 140mln by 2018, which should help lift sales and earnings significantly.

Commentators expect it to fully recover as its reach spreads to the broader market.

Shares were down 4% today to $97.46.

Knock. Knock.



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October 18 2016
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