Netflix is ​​underperforming, stocks are depreciating

The number of paid subscribers to Netflix's streaming platform is growing slower than expected by stock market analysts, so the company's shares are cheaper. Before the US session, they are valued at 6 percent. lower than the previous day.

During the lockdown, interest in the Netflix streaming platform increased practically all over the world. People encouraged, and others even forced to stay in their homes, were looking for entertainment, and undoubtedly one of the TV series and movies offered by Netflix is ​​one of the undoubtedly unnecessary leaving home. But the company's results for the third quarter - with restrictions around the world loosened and almost completely lifted in many places - are disappointing.

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2,2 million new subscribers? Little

Analysts mostly missed the estimates of new subscribers. The market consensus says that there will be an increase of 3,57 million subscribers, while the increase amounted to 2,2 million subscribers. The company's management reassures shareholders that this was expected - precisely because of the situation related to the relaxation of restrictions that appeared at the beginning of the coronavirus pandemic. A year earlier, the increase in subscribers amounted to 6,8 million, and then no one in the world had heard about the coronavirus pandemic and the Covid-19 disease caused by it. So it was expected that this year's results would be better than those just published in the interim report.

"In our opinion, the slower pace of growth is the result of the record inflows of new subscribers in the first half of the year, when people were eager to buy the service, forced to spend time mainly at home due to the coronavirus pandemic and the lockdown in the economy" - we read in the letter to shareholders.

The fourth quarter is to be very good

Moreover, the management board forecasts that the fourth quarter will be very good again. The number of new subscribers is to increase by approx. 6 million, but the company will find it difficult to break the current record from the fourth quarter of 2019, when over 8,8 million people from around the world subscribed to Netflix for the first time.

Netflix stock chart, D1 interval. Source: xNUMX XTB.

Good forecasts for the near future have not calmed down - at least for now - investors who tend to sell the company's shares rather than buy them in the OTC trade. Before the US stock market opens, Netflix shares are already losing 6% and are trading below $ 500 apiece. There are approximately 5 hours left before the session starts.