7% is how high Netflix management thinks operating margins will reach this year.
Netflix (NASDAQ:NFLX) last announced its earnings results on Monday, April 17th.
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"That is a bit accomplishment", Netflix chief executive Reed Hastings said during a video briefing with analysts. The timing of various revenue-driving events and costs will vary from year to year, but Netflix is clearly moving in the right direction no matter which business metric investors look at.
For the first quarter, Netflix added 1.42 million USA subs and 3.53 million overseas. Netflix ended March with almost 48 million subscribers outside the U.S.
Subscriber rolls, the most closely watched measure of Netflix's growth, rose by just under 5 million globally in the first quarter, behind analysts' projection of 5.18 million, according to FactSet StreetAccount. They now have a United States dollars 175 price target on the stock. It ended 2016 with 93.8 million streaming subscribers.
Several large investors have recently bought and sold shares of the company. The company missed its own growth estimates by about 250,000 subscribers as it lost some momentum overseas.
Netflix still has a ways to go to catch up with HBO, the popular pay-TV channel that has served as its role model.
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He downplayed competition, saying "entertainment is not a zero-sum game" and it is more about winning fans with content in the on-demand viewing market.
The network took in 5 million more subscribers during the first three months of the year.
"The model works from a consumer perspective because it is such a good value", Pachter said.
But Hastings, as he has in the past, would only reply in generalities, this time saying Netflix trails far behind YouTube for views and that the company has "YouTube envy".
But investors have been tired of Netflix's sky-high growth and continue to search for signs that the company will start to see fewer subscriber gains every month as it runs out of new countries to enter. Regarding Amazon's deal to stream live National Football League games, the shareholder letter reads, "This is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows".
As it is, Netflix expects to spend about $6 billion on programming this year. Canaccord Genuity raised their target price on Netflix from $160.00 to $165.00 and gave the company a "buy" rating in a report on Tuesday. Amazon, meanwhile, will reach more than 85 million US viewers this year, or 44 percent of OTT viewers.
04/13/2017 - Netflix, Inc. had its "overweight" rating reiterated by analysts at Cantor Fitzgerald.
But if it wants to keep investors happy, the company will eventually have to improve its relatively low profit margin. Compared to the same period last year, this year's first quarter income represents a 38 percent improvement for Netflix. The original version of this piece can be read at https://www.com-unik.info/2017/04/16/netflix-inc-nflx-upgraded-at-zacks-investment-research-2-updated.html.
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