Yesterday, Netflix, Inc. (NASDAQ:NFLX) announced better-than-expected fourth quarter earnings.
A few months back, NFLX stock dropped from a “buy” rating to a “hold,” will this report bump NFLX back into “buy” territory?
Netflix – Company Profile
Since 1997, Netflix has been a leading provider of on-demand internet streaming and DVD-by-mail services.
Over the past few years, Netflix has worked double-time to increase its subscriber base, with nearly 48 million customers in approximately 40 countries.
Netflix employs more than 2,000 employees and has had great success with its new crop of original programming, and collaborating with cable television companies to become a fixture on television screens as well as computer screens.
Netflix – Earnings Buzz
Netflix reported its fourth-quarter results just after market close yesterday. NFLX stock posted in-line revenue of $1.48 billion and earnings of 72 cents per share, beating consensus estimates of 45 cents per share.
Net income jumped to $45.5 million, surpassing Netflix’s own estimates of $27 million. The headline number was that Netflix added 4.33 million members, compared to 4.07 million in the same quarter last year — a 6% increase. NFLX shares rose near 13% during after-hours trading Tuesday.
Netflix – Current Ratings
As I just mentioned before, NFLX has slid from “buy” territory to “hold” in recent months because Netflix’s buying pressure is lackluster, earning a C for its Quantitative Grade.
Meanwhile, Netflix’s fundamentals are a mixed bag. NFLX currently receives strong ratings for sales growth, operating margin growth, earnings growth, earnings momentum and cash flow (all A-rated) and solid marks for return on equity (B). NFLX earns mediocre marks for analyst earnings revisions (C) and earnings surprises (C), while outright failing in earnings momentum. Overall, NFLX earns a B for its Fundamental Grade.
As of this posting, Jan. 21, I consider NFLX a C-rated “hold.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
