Netflix crosses $100 bn in market cap for first time
NEW YORK: Netflix Inc.’s shares rose 13% to a record high on Tuesday after the video streaming service trounced Wall Street targets for new subscribers in the fourth quarter. At least 16 brokerages raised their price targets for the company’ s shares by as much as $72. Analysts at Bernstein were most bullish, setting targets of $302 compared to the $252 it traded at on Tuesday.
The video-streaming giant crossed $100 billion market value for the first time and was on track to add more than $10 billion if current prices hold.
In a statement after markets closed on Monday, Netflix said it added 6.36 million subscribers in international markets in the fourth quarter, beating analysts’ expectations of 5.1 million, according to FactSet.
It now has 117.58 million streaming subscribers globally.
“Overall, this was a‘ home run quarter’ for Netflix and should put any lingering worries to rest around sub (scriber) growth, international ramp, and the‘ negative’ possible effects from the (subscription) price increase,” GB H Insights analyst Daniel Iv es said.
The company, which showcased popular returning series Stranger Things, The Crown and Black Mirror in the quarter, in October hiked its monthly fees for US customers for the first time in two years.
“The subscriber growth validates management’s ongoing content investment, and should contribute to comfort with 2018’s increased $7.5-8.0 billion content spend and associated marketing to support the content slate and ever-growing library,” Canaccord Genuity analyst Michael Graham said.
Netflix and its peers Hulu and Amazon. com Inc .’ sP rime Video are steadily increasing budgets for producing original shows as they gain market share from traditional cable TV providers.
In contrast, US wireless carrier Verizon Communications Inc. said on Tuesday that it lost a net of 29,000 Fios Video connections in the latest quarter, reflecting the shift from traditional linear video to over-the-top offerings.
Netflix spent $90 million on Will Smith action movie Bright last year, its largest investment in an original film to date, and is already planning a sequel and additional investment in original films.