On top of earnings, Netflix had previously forecast that it would add 2.25 million domestic users in this first quarter, almost in-line with the 2.33 million subscriber additions in the fourth quarter of 2013 and higher than the 2.03 million added in the first quarter a year ago. International subscriber additions were forecast to be 1.6 million in the first quarter, up from 1.02 million a year ago. The total expectation is to end the first quarter with 48 million subscribers.
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On an interpolated basis, guidance was put around $1.06 billion in revenue (perhaps not including other sales) with earnings per share of close to $0.78. Thomson Reuters is calling for $0.83 in earnings per share and $1.27 billion in revenue.
One thing to consider is valuation as well. Even after a large slide in the stock price, Netflix shares trade at almost 85 times this year’s expected earnings. As of last week’s closing price, Netflix shares were down almost 25% from their peak, and the number of down days to up days in the stock price has been off the chart in the past six weeks or more.
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Shares closed at $345.74, and the consensus price target ahead of earnings was $386.07. Shares were trading up less than 1% right after the opening bell on Monday. Oppenheimer recently added Netflix to a list of stocks to buy on weakness, but it did not catch the bottom in the call.
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