Tag Archives: nflx

Netflix, Delta Air Follow Apple In Undercutting This Key Support Area

Netflix ( NFLX ) and Delta Air Lines ( DAL ) are among the big-name companies that undercut their 200-day moving averages Monday, following on the heels of  Apple ( AAPL ). Los Gatos, Calif.-based Netflix fell 2.8% to 108.40 on the stock market today , closing above its 200-day line after falling as low as 106.02 intraday. Netflix moved above the support/resistance level last week. But shares crashed late Monday after Netflix beat Q1 earnings estimates but gave weak Q2 subscriber growth targets. The streaming video giant  faces stepped-up competition with Amazon.com ( AMZN ), which is now offering its Amazon Prime Video as a stand-alone service for $8.99 per month, $1 cheaper than Netflix’s standard streaming plan. Amazon, which reports Q1 results on April 28, broke out of a cup-with-handle formation last week, rising more than 6% in the process. Amazon rose 1.5% Monday. Delta Air Lines fell below its 50- and 200-day moving lines Monday, losing 2%, while most other carriers’ stocks were little changed. The Atlanta-based airline last week reported strong Q1 earnings, boosted by cheaper jet fuel, but revenue slipped 1% as passengers paid slightly less for each mile they flew. Meanwhile, Apple stock fell 2.2%, falling further below its 200-day line after falling below that area on Friday. A research note from Pacific Crest Securities found that consumers prefer data-collecting gadgets such as Fitbit ( FIT ) opposed to more complex wearables such as the Apple Watch. Fitbit sold 21 million units last year compared to the 10 million Apple Watches sold, Pacific Crest Securities said. IBD’s Take: How does Apple stock rate? Objective analysis at IBD Stock Checkup Finally, keep an eye on social networking giant Facebook ( FB ). Facebook stock rose fractionally Monday as continues to find support at its 50-day moving average. Facebook is well above its 200-day line but has lost sight of a buy point at 117.09.

Netflix Seen Posting Worst Earnings In Over 3 Years

With Netflix ( NFLX ) investing heavily in its global expansion, Wall Street is expecting the Internet TV service to report its lowest earnings per share in over three years when it posts first-quarter results after the close Monday. Analysts polled by Thomson Reuters expect Netflix to earn 3 cents a share in Q1, down 40% from the year-earlier quarter. That would be the company’s lowest EPS total since the fourth quarter of 2012, when it reported 2 cents in earnings per share. Netflix sales are seen rising 25% to $1.965 billion in the March quarter when it completed its international expansion, excluding China. Analysts don’t see EPS growth returning at Netflix until the fourth quarter. For the next several quarters, the focus of investors will be on subscriber growth and whether Netflix can continue to add new customers at a quick pace. In the December quarter, Netflix added 5.59 million new streaming subscribers, bringing its total to 74.76 million subscribers worldwide. Netflix added 1.56 million U.S. streaming subscribers and 4.04 million international subscribers in Q4. For the March quarter, Netflix forecast 6.1 million new streaming subscribers for a global total of 80.86 million. The Los Gatos, Calif.-based company is targeting 1.75 million new U.S. streaming subscribers and 4.35 million new international subscribers. RBC Capital Markets analyst Mark Mahaney on Friday reiterated his outperform rating on Netflix stock with a price target of 140. “Based on intra-quarter data points, our proprietary survey work, and our model sensitivity work, we believe Street revenue/EPS estimates for Q1 are reasonable,” Mahaney said in a research report. “For the Q2 guide, we believe the Street’s outlook for roughly 600,000 domestic subscriber adds may be slightly aggressive, given uncertainty over pending price increases. But we view the Street’s international subscriber adds outlook of 2.9 million for Q2 as realistic.” Netflix stock tumbled to as low as 106.02 on the stock market today , briefly undercutting its 200-day moving average . Ahead of the closing bell shares were down more than 2% near 109. On Sunday, Amazon ( AMZN ) began offering Amazon Prime Video as a standalone service, for $8.99 a month, a dollar less than Netflix’s basic streaming offering. Amazon stock rose 1.5%, extending its recent breakout. Some Analysts Skeptical Of Netflix’s Prospects Other analysts are more cautious ahead of Netflix’s Q1 earnings release. In a report Friday, Mizuho Securities analyst Neil Doshi maintained his neutral rating on Netflix with price target of 120. While expectations are generally positive ahead of Netflix’s Q1 report, Doshi is concerned about the company’s continued free cash flow losses and whether it can successfully scale local original content in new international markets. FBR analyst Barton Crockett maintained his market perform rating and price target of 100. Netflix’s Q1 report “is likely to feature healthy but decelerating subscriber growth in the U.S. and a record level of growth internationally, powered by new country launches and very robust growth in Latin America,” Crockett said in a report Friday. However, Netflix’s growth appears to be plateauing in developed markets where Netflix has been available for some time, such as the U.S., U.K. and Canada, he said. “We suspect that similar maturity will arrive over the next couple of years in other developed country markets,” Crockett said. “We also believe that some investors may be overly optimistic about the degree of flow-through in second-half 2016 from U.S. price hikes.” RELATED: Netflix Stock Surges Ahead Of Q1 Earnings Report Next Week Netflix Rate Hike To Be Key Test Of Its Pricing Power

Amazon Goes Head-To-Head With Netflix In Streaming Video

After amassing a portfolio of critically acclaimed original TV series, Amazon.com ( AMZN ) has decided the time is right for its subscription streaming video service to go head-to-head with industry leader Netflix ( NFLX ). The Seattle-based e-commerce giant late Sunday revealed that it will offer its Amazon Prime Video as a stand-alone service for $8.99 a month, a dollar less than Netflix’s standard streaming plan. Amazon Prime Video was launched five years ago as an extra for subscribers of Amazon Prime, a program that offers free two-day shipping on millions of items. Amazon Prime costs $99 a year. In addition to the stand-alone video service, Amazon also is offering full Prime membership on a monthly basis. Customers can pay $10.99 a month with no annual commitment or save 25% by paying for the full-year plan. Like Netflix, Amazon has been investing in original content as well as signing exclusive licensing deals for cable and broadcast shows. Amazon original series include “Transparent,” “Mozart in the Jungle,” “Catastrophe,” “Bosch,” “The Man in the High Castle” and “Red Oaks.” Other competitors in the Internet video sector include Hulu and Time Warner ‘s ( TWX ) HBO. Hulu is co-owned by Comcast ( CMCSA ), Disney ( DIS ) and Fox ( FOXA ). Amazon’s move comes as many long-time Netflix customers will see the price of their service jump from $7.99 to $9.99 a month starting next month. Netflix boosted its pricing starting two years ago, but it provided grace periods for existing customers. Netflix stock was down about 3% to near 108 in afternoon trading on the stock market today . The Los Gatos, Calif.-based company is scheduled to report first-quarter earnings after the market close today. Amazon stock was up almost 1% to about 631. Amazon gets an IBD Composite Rating of 84 out of a possible 99, and Netflix a 51. For when to buy, hold or sell off Amazon and other top stocks, sign up for a free trial of IBD Leaderboard Amazon is offering the stand-alone video service only in the U.S. for now, but it is likely to take it to international markets soon, CCS Insight analyst Paolo Pescatore said in a research note Monday. Amazon’s new video offer will limit Netflix’s ability to grow its domestic subscriber base, Wedbush analyst Michael Pachter said in a research note Sunday. “The monthly video offering reflects Amazon’s determination to capture an increased share of Netflix’s addressable market,” he said. “While we don’t expect a significant number of current Netflix customers to defect to Amazon Instant Video, it is likely that Amazon and Netflix will divide the remaining uncommitted market on a roughly equal basis, severely impacting Netflix’s continued domestic growth.” Subscriber Fees Hiked Pachter believes Amazon timed the offer to take advantage of the impending price increase at Netflix. An estimated 30 million domestic Netflix subscribers will see their monthly subscription fees go up starting May 9, he said. Pachter rates Amazon stock as outperform with a price target of 700 and Netflix as underperform with a price target of 45. RBC Capital Markets analyst Mark Mahaney said Monday that the Amazon offer “creates a negative headwind for Netflix.” However, Mahaney reiterated his outperform rating on Netflix with a price target of 140. “We view this move by Amazon as a significant negative development for Netflix,” he said in a report. “Amazon certainly has the brand name, the customer relationships and the focus on high-quality consumer experiences to impact the growth in Netflix’s U.S. subscriber base, and perhaps eventually its global subscriber base.” Netflix is facing growth challenges in the U.S. market. In the fourth quarter last year, it missed its own target for new domestic subscribers. But its international growth easily beat expectations and offset U.S. weakness. Netflix Original Shows Rank Tops In a survey released last week, consumers ranked Netflix as No. 1 for original programming. It topped HBO for the first time in the six years that Morgan Stanley has tracked consumer preferences in premium video services. Some 29% of survey respondents said Netflix was best in original programming, up from 23% last year, while HBO came in second place at 18% (compared with 31% last year), Morgan Stanley said. Amazon.com, Hulu and CBS (CBS)-owned Showtime were each near 5%. Netflix original shows include “House of Cards,” “Orange Is the New Black,” “Unbreakable Kimmy Schmidt,” “Narcos” and Marvel comic-book hero shows “Daredevil” and “Jessica Jones.”