Netflix Shares Plunge 35% on Disappointing Paid Net Change in Q1
<p><a href='https://financialmodelingprep.com/financial-summary/NFLX'>Netflix (NASDAQ:NFLX) </a>shares dropped around 35% Wednesday afternoon following the company’s reported Q1 results, highlighted by disappointing net additions and guidance.</p>
<p>EPS was $3.53 in Q1, compared to the Street estimate of $2.91. Revenue rose 9.8% year-over-year to $7.87 billion, compared to the Street estimate of $7.95 billion.</p>
<p>Paid net additions in Q1 were -200,000, significantly lower than the Street estimate of 2.5 million. These disappointing results marked the first time the company reported negative quarterly net additions in the last decade. </p>
<p>Following the results, around dozen brokerages downgraded the company, including Oppenheimer, which adjusted its rating on the company to perform from outperform. </p>
<p>According to the analysts at Oppenheimer, the UCAN streaming market is more saturated and filled with a multitude of services offering compelling content at lower-than-Netflix prices. This, according to the analysts, presents risk to back-half subscriber additions. The analysts also mentioned that the initiatives around password sharing and a potential advertising offering will probably take more than 12 months to develop.</p>
<p>The company provided its Q2 outlook, expecting EPS to be $3.00, slightly below the consensus estimate of $3.02, and revenue to be $8.05 billion, compared to the consensus estimate of $8.23 billion. Paid net additions are expected to be down by 2 million in Q2, significantly lower than the consensus estimate of a 2.4 million growth.</p>

NASDAQ:NFLX