Business

Netflix’s Mixed Bag Sends Stock Nuclear

Yuppie Capital

After climbing to fresh highs throughout the pandemic-driven shutdown kingpins (Zoom, Microsoft, Roku, etc.), Netlifx enjoyed a somewhat pleasant ride to absolutely astronomical evaluations, only to come crashing down amidst a broad stock market sell-off, and mass subscription exodus, the stock is currently down ~70% from its highs back in November 2021.

NFLX Stock, YTD

The company faced some reprieve when they reported not exactly great news, but not as heinous as some were expecting. They reported pretty weak outlook and a miss on revenue, but posted a smaller than expected subscriber count.

Q2 revenue $7.97BN, missing the Exp. $8.04BN

Q2 EPS $3.20, beating the Exp. $2.91

Streaming paid net change -970K beating the  Exp. -2 MM

Netflix essentially assuaged the fears of investors that they may be hemorrhaging, but they aren’t bleeding out just yet. And what does that mean at this day in age? AS BULLISH AS IT GETS, BABY.

The company’s forward guidance isn’t bad, but it’s not great, either. Netlifx is reporting to grow their subscriber base by 1 million in Q3, but the consensus was expecting a 1.6 million subscriber growth in the 3rd quarter.

Netflix is also joining the likes of Microsoft (amongst others) in blaming the absolute surge in the U.S. Dollar as rationale to justify their lowered sales number. Netflix’s revenue source from overseas subscribers will ultimately be in jeopardy as long as the U.S. Dollar retains its herculean move upward.

“We have high exposure to this unprecedented appreciation in the USD because nearly 60% of our revenue comes from outside the US and swings in F/X have a large flow through to operating profit as most of our expenses are in USD and don’t benefit from a stronger USD.”

With recent moves of the Euro upward, it may just be enough to help facilitate a strong recovery for Netflix, who quite desperately needs any help they can get, macro forces or not. Popular fade accounts on Twitter who have also called for the Netflix short may have unofficially called the bottom of the stock. ONE WAY TICKET TO THE MOON.