On December 28, Blasting News featured an Investor's Business Daily report by Alissa Coram that highlighted a "buy point" for NFLX stock of $129.39, then $0.10 above its all-time high of $129.29. The newspaper encourages readers who use its buy points to take steps to protect themselves from risk using stop-losses and diversification, among other methods. Since then, NFLX stock had traded as high as $135.40, until tonight. Some days of price gains have been accompanied by heavier-than-average volume. Many traders were watching when Netflix, Inc.
(Nasdaq: NFLX) reported earnings for the fourth quarter of 2016 this evening. Shares of NFLX are currently trading at $144 in the after-hours market, higher by more than 8 percent, at a new all-time high.
Highlights of the Netflix report included earnings per share of $0.15, beating the Wall Street analyst consensus of $0.14, reported by Yahoo Finance, by $0.01, or 7.1 percent. EPS was up $0.05 or 50.0 percent, year over year. Revenue was reported as $2.48 billion, beating street expectations of $2.47 billion, by $10 million, or 0.4 percent. Revenue was up, by $660 million, or 36.3 percent, compared with the fourth quarter of 2015. A release by the company expressed a goal of "7% for the full year 2017 based on current F/X rates" for the company's operating margin.
NFLX earnings call scheduled for 5 p.m. ET
Reed Hastings, the streaming-film service's chief executive officer, and management will discuss the Netflix earnings with investors and analysts in a call scheduled for 5 p.m. ET that may be accessed from the company's investor relations section of their website. Netflix stock has gained more than 2,100 percent since coming public in May 2002.
The shares pay no dividend
Part of the reason so many investors are interested in Netflix's earnings is because of how fast the service, that reports only 3,100 employees, has been growing. Going into today's report, the consensus had NFLX EPS growing by 200.0 percent in the first quarter of 2017, and by 129.3 percent for the full 2017 fiscal year.
Further, Netflix revenue is expected to grow by 32.6 percent next quarter and 25.3 percent for the full year in 2017. Forecasts will likely change with this evening's Netflix earnings.
Levered operations result in impressive Netflix earnings growth
For a company with a market capitalization of $56.6 billion and a last-reported cash position of $1.34 billion, the household name's debt-load of $2.37 billion and debt-to-equity ratio of 93.87 percent might not seem unreasonable, given the hefty top and bottom-line growth Netflix has delivered. For all its growth, Netflix's margins are quite thin, as might be expected of a disruptive service provider operating at the scale that it does. The company, which has a forward price-to-earnings ratio of 140.55, last reported an operating margin of 3.49 percent, a profit margin of 2.0 percent, and a return on equity of 6.95 percent. Numbers that most investors would likely prefer to see improve.
