Should You Buy Netflix After Its More Than 40% Decline?
$Netflix(NFLX.US$ in Los Gatos, Calif., offers TV series, documentaries, feature films, and mobile games across various genres and languages. It recently announced that it had entered a combination agreement to acquire Next Games to expand its internal game studio capabilities. However, the company posted disappointing results, losing 200,000 customers in the first quarter and projecting its subscribers will shrink by another 2 million customers in the second quarter.
The stock has declined 43.9% in price over the past month and 68.8% over the past six months to close yesterday’s trading session at $209.91. In addition, it is currently trading 70.1% below its 52-week high of $700.99, which it hit on Nov. 17, 2021.
Furthermore, stiff competition, the impact of account sharing, increasing inflation, and the Russia-Ukraine war make the company’s near-term outlook uncertain.
For its fiscal first quarter, ended March 31, 2022, NFLX’s revenue surged 9.8% year-over-year to $7.87 billion. The company’s operating income increased 0.6% year-over-year to $1.97 billion. However, its net income came in at $1.60 billion, representing a 6.4% year-over-year decrease. Also, its EPS was $3.53, down 5.9% year-over-year.
Furthermore, stiff competition, the impact of account sharing, increasing inflation, and the Russia-Ukraine war make the company’s near-term outlook uncertain.
For its fiscal first quarter, ended March 31, 2022, NFLX’s revenue surged 9.8% year-over-year to $7.87 billion. The company’s operating income increased 0.6% year-over-year to $1.97 billion. However, its net income came in at $1.60 billion, representing a 6.4% year-over-year decrease. Also, its EPS was $3.53, down 5.9% year-over-year.
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