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Netflix Inc NFLX

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Netflix Whiffs Versus Q1 Subscriber Guidance; Weak Q2 Guidance Implies Competition Gaining Share

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Netflix started 2021 with weak first quarter subscriber growth, below our estimate and the relatively conservative guidance issued in January. The subscriber pull forward in the first half of 2020 and the global increase in competition appear to have stunted net additions. Second quarter subscriber guidance is also very weak: 1 million net adds would be one of the lowest quarters ever for Netflix. We continue to think that the expansion of Disney+, HBO Max, and other services will increase churn and pressure gross adds for Netflix over the near future. We maintain our narrow moat and fair value estimate of $250.

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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.

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

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