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Netflix Inc NFLX

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Netflix Beats Fourth-Quarter Subscriber Guidance; EMEA Driving Growth for Now

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Netflix ended an impressive 2020 with strong subscriber growth, beating our estimate and relatively conservative management guidance provided a quarter ago. Despite the subscriber beat, revenue was in line with our projections for the quarter. We still believe that the global rollout of Disney+ and the launches of Peacock and HBO Max will increase churn and pressure gross adds for Netflix over the near future. However, Netflix is tracking ahead of our previous expectations on free cash burn and margin expansion. As a result, we are raising our fair value estimate to $250 from $200. We continue to believe Netflix’s share price assumes unrealistic long-term growth and profitability.

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Company Profile

Business Description

Netflix's primary business is a streaming video on demand service now available in almost every country worldwide except China. Netflix delivers original and third-party digital video content to PCs, Internet-connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. In 2011, Netflix introduced DVD-only plans and separated the combined streaming and DVD plans, making it necessary for subscribers who want both to have separate plans.

100 Winchester Circle
Los Gatos, CA, 95032
T +1 408 540-3700
Sector Communication Services
Industry Entertainment
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 9,400