Shares have surged more than two-thirds this year and closed on Tuesday at $346.40 in NY, valuing the company at nearly $154bn. Some analysts were even quite negative on Netflix as the company's pre-earnings valuations were 127 times 2018 earnings per share and 80 times those for 2019.
Netflix had expected to add about five million members in the quarter. Its shares are up about 90% this year.
The company added 6.96 million new members in the last three months, a record for the quarter and well ahead of analysts expectations, erasing fears that its growth had slowed.
Hargreaves is less optimistic over the company's ability to raise its profit margins over the long term due to the company's fourth-quarter forecast for contribution profit, a measure of profitability.
Interested in Netflix? Add Netflix as an interest to stay up to date on the latest Netflix news, video, and analysis from ABC News. All of this came against the backdrop of a missed second quarter subscriber growth forecast, a dip in its share price and worries that its...
However, notwithstanding the impressive results, Wedbush analyst Michael Pachter sees clouds on the horizon and, as such, reiterates an Underperform rating on NFLX stock, while lifting the price target to $150 (from $125), which implies a potential downside of 57% from where the stock is now trading.
Netflix said the investments were critical to the firm's growth.
Netflix Inc. believes that India has hundreds of millions of potential video customers, and the company will explore a lower-priced plan to reel them in.
In a coup, Netflix shows won 23 Emmys in last month's awards ceremony, tying HBO for the most among all TV networks.
Netflix also announced that it plans on spending $1bn on producing new content over the next 10 years, bolstered by a new production hub to open in the New Mexico city of Albuquerque.
Revenue in the quarter increased 34 per cent year-on-year to almost $4 billion, while profits more than tripled to $403 million. The company had forecast gaining 4.35 million global subscribers and 650,000 domestic subscribers during the period.
The company exceeded forecasts in both US and worldwide markets but the bulk of the new subscribers came from outside the United States, where the company has been investing aggressively. Next year, Disney, which bought the film and TV assets of Twenty-First Century Fox, is set to launch its streaming service, as is WarnerMedia, the amalgam of AT&T and Time Warner.
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