Netflix up 15% on a blockbuster Q3: ‘it’s one of my favourite stocks’

on Oct 18, 2022
  • Netflix Inc adds 2.41 million subscribers in its fiscal third quarter.
  • Shannon Saccocia and Mark Mahaney share their outlook on Netflix.
  • Netflix stock is still down 60% versus the start of the year 2022.

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Netflix Inc (NASDAQ: NFLX) jumped 15% in extended trading after the streaming giant pleased investors both in terms of subscriber number and the quarterly profit and revenue.

Netflix made up for subscriber losses

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Netflix added 2.41 million subscribers in its recent quarter. That’s more than double the 1.1 million that Street had expected. In the prior two quarters combined, it had lost more than a million.

What’s more exciting, though, is the guidance. Netflix forecasts as much as 4.5 million new subscribers in Q4 versus analysts at 4.0 million. Discussing the earnings report on CNBC’s “Closing Bell: Overtime”, Shannon Saccocia – the Chief Investment Officer at SVP Private said:

If you look at 2023 and potential for free cash flow generation in this stock, you’ll be able to drive some earnings. We might have a bit of headwind for margin as they have a growing international business, but these numbers are blockbuster.

Mark Mahaney’s take on the Netflix stock

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Netflix is set to launch its cheaper ($6.99 a month), ad-supported tier on November 3rd that’s expected to supercharge its subscriber and revenue growth. On a separate CNBC interview, Evercore’s Mark Mahaney said:

I think it’s the biggest catalyst in internet land. It’s a great, smart initiative. It’s a super aggressive price point. We’re starting to see this inflection point in free cash flow. I like Netflix, it’s one of my favourite stocks for next 12 months.

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The media company is committed to cracking down on password sharing as well.

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Notable figures in Netflix Q3 results

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  • Earned $1.4 billion versus the year-ago
  • Per-share earnings slipped from $3.16 to $3.10
  • Revenue climbed 6.0% year-on-year to $7.92 billion
  • Consensus was $2.14 a share on $7.84 billion in sales

For the fiscal fourth quarter, Netflix is calling for $7.80 billion in revenue, as per the letter to shareholders. In comparison, experts had forecast $7.97 billion.


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