Netflix New Initiative Growth Important for Bullish Signal
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With $Netflix(NFLX)$ disallowing password sharing, it will boost the increase of subscribers per household.
Reason is because there are more and more quality contents being produced jointly by Netflix and their partners. There are some quality variety show and documentary which is really worth watching.
Price seem to be trading downwards.
Netflix Subscriber Count by Quarter
Netflix reported its first-quarter 2023 earnings Tuesday.
Netflix added 1.75 million net new subscribers in Q1 2023, compared to 7.66 million in Q4 2022, where the increase is really significant.
The Q4 2022 is also the period where its low-cost, ad-supported tier is launched. Q1 2023 shall be the first full quarter with the ad-filled option.
How Netflix Price move during last Q4 2022 earnings release
If we go back to the last Q4 22 earnings, we can see that the price move after the earning release of increase of 8.7 millions new subscribers does not seem to boost the stock price.
The only time that we can see a good price move is in Jul 2022 when Netflix release their Q2 2022 earnings.
Better Forecast Earnings from ad-filled option vs ad-supported tier
Globally, around 7% of consumers on Netflix use the ad-supported tier, and it’s expected to rise to 24% by 2024. According to projections, these figures will reach 36% in 2025 and 58% in 2027.
From what I foresee, Netflix would benefit from the ad-supported tier. The reception from subscribers to this ad-supported tier have been pretty ok.
Even though we see a drop of subscribers in the latest earnings, the new initial by Netflix which I am looking forward to, might help to move the price up.
Summary
Netflix is a business who is subscription based. So there are customer acquisition cost to get new customer.
As long as there is no loss of existing subscribers then a small amount of new subscribers might not be that bad.
Investors sentiment seem to be on the downside, shall monitor and see what happen later.
Appreciate if you could share your thoughts in the comment section on what are your thoughts on better subscribers growth form Netflix to boost their stock price?
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I think the opposite happened
We are below that. Nflx has hundreds of millions to buy back stock at these low prices.
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