Netflix Stock dropped by 5% on Wednesday
Shares of Netflix dropped by almost 5% on Wednesday morning after the media-streaming specialist reported earnings. Before this event, Netflix approached some financial targets while dropping again. As of 1:26 p.m. EDT, the stock showed a decrease of 4.2%.
However, revenues from the second quarter rose by 19% to $7.35 billion, which is lightly over management’s guidance of $7.31 billion. Earnings bounced 90%, landing at $2.98 per share.
The guidance target pointed to $3.17 per share, while the average analyst needed to see about $3.16 per share. Netflix’s operating earnings came in below the official target, while its 1.55 million new subscribers exceeded the official target of 1 million.
Management also stated that it would release a variety of games as a free version to its video-streaming plans. This new feature will turn every device into a viable gaming platform.
It doesn’t seem surprising to see Netflix focusing on a bottom-line reading and a forecast for subscriber growth. At the same time, profits were low for various reasons, following a 10% increase and 38% higher marketing expenses.
This recent share price decrease makes sense from a specific point of view. Netflix is trying to do everything right for this particular time because the company prefers short-term stability over long-term growth.
Should you invest in Netflix right now?
Before you consider investing in Netflix, you need to be careful.
There are analysts who believe that there are the ten best stocks for investors to buy now, but Netflix is not in one of them.
However, Netflix maintained a broad subscriber point in a streaming market that includes Walt Disney +0.09%, Apple -0.50%, AT&T -0.05%, Comcast +1.29%, and Amazon.com +0.35% despite a shortage of fresh content at the beginning of 2021.
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