Netflix stock price soars almost 15% on Q4 beat
- Netflix said it attracted 8.5 million paid net subscribers in the first quarter to surpass 200 million
- The streaming platform is now sustainable and it doesn’t have to raise new funds for its operations
- Netflix share price soared almost 15% to hit fresh all-time highs above the $575.00 handle in pre-open trading
Shares of Netflix (NASDAQ: NFLX) soared nearly 15% in pre-market trading hours on Wednesday after the streaming platform reported stronger-than-expected results for its fourth quarter.
Fundamental analysis: Exceeding 200 million subscribers
Netflix said it attracted 8.5 million paid net subscribers in the first quarter, bringing the total number of new members to 37 million in 2020. Overall, the streaming giant now has 203.6 million subscribers around the world.
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The company reported $25 billion in annual revenue, which is about 1% higher compared to the company’s latest guidance. This means that Netflix is now sustainable and it doesn’t have to raise new funds for its operations.
“2020 was an incredibly difficult year with extraordinary loss for so many families, new restrictions that none of us have ever had to live with before and great uncertainty. We’re enormously grateful that in these uniquely challenging times we’ve been able to provide our members around the world with a source of escape, connection and joy while continuing to build our business,” the company said in a statement.
The operating margin rose to 14.4% from the previously expected 13.8%. For the ongoing quarter, Netflix expects to welcome 6 million paid net adds.
“As we said last quarter, we intend to continue to grow our operating margin each year at an average rate of three percentage points per year over any few-year period, but we anticipate some lumpiness. Some years we’ll be a little over (like in 2020), some years a little under (like in 2021), but we are trying to keep on an average three percentage points per year long-term trajectory.”
Technical analysis: Shares explode higher
Netflix share price soared almost 15% to hit fresh all-time highs above the $575.00 handle in pre-open trading. Prior to today, shares have traded over 7% lower in January after adding more than 10% in December.
A close above the previous all-time high will pave the way for a test of the next target for Netflix investors that sits just above the $600 mark, while the long-term resistance is located at $640.
Shares of Netflix exploded higher in after-market trading session after the streaming platform presented another set of impressive results for the previous quarter.