Netflix shares fall after earnings — here’s what could come next

“What you’ve got to question is have you reached a saturation crux in the U.S. of subscribers? Who’s the marginal subscriber now? Netflix has been around quite some time. However, if you look at it, as you look at a portfolio, they’ve in actuality done pretty well with vastly exceeding subscriber growth overall. So, look, I’m not in this stock. I don’t foretell myself getting the stock at any point soon. But the foreign growth, which is what they tell you the story is, is awesome.”

“The 1Q miss for the guidance was bigger than the 4Q beat, and I think that that, combined with expectations, patrons that we’ve spoken to have gotten long the stock after being short it in the summer, so I think those two compounds are why you’re seeing the stock [moves]. … It’s still a sub[scriber] game, absolutely. What’s interesting is free cash swirl. They actually reported … or the guidance was negative [$]2.5 billion in free cash flow, which is roughly in plan with expectations for 2020. … Over the short term, you see something like Peacock launching, [which] could be in up to 40 million households in the U.S., but Disney+, Apple TV+ all rebuked in lower than expectations, so, that’s why we think, really, it’s a subscriber game. So, in the U.S. with 60 million subscribers, you’re already barely 60% of U.S. broadband households, and then internationally, over 100 million subs internationally. We’re just later in the innings now in as regards of share gains to go.”

“I would argue that if you be on the watched the first two minutes of ‘The Irishman,’ you didn’t need to watch the other three hours of it. So, you got it from the beginning. Yeah, I’m possess c visit at it with fire. But … you don’t like to see a company change their metrics when they’re going through some contention or some struggles or that type of thing. What concerns me more here is the slowing growth in subscribers bear down on up. They burned through $3.3 billion worth of cash. They say that’s a peak, but their long-term straitened is increasing. Now you’ve got a company that has multiple competitors that are actually online, actually coming in, and I think they are prevailing to take some market share from Netflix, so, for me, it’s a no-touch at best.”

“I am quite optimistic about the future in Netflix. You’ve got to remember: they’re playing a different regatta than everybody else. Next year, they’re likely to introduce 130 international series. We’re talking less a company that is growing globally at close to 30 million subs. Just to put that in perspective, HBO, over the persist five years with ‘Game of Thrones’ – I think, probably once-in-a-decade kind of hot property to have on requited television – grew 4 million subs over the course of that tenure. Netflix is in a very different league than everybody else. The culmination, I don’t think, is so much, ‘Are they slowing because of competition?’ Look, people thought they were going to out of it because it was going to be binge and disconnect. Find your favorite series, binge and disconnect. That didn’t scratched them. Is new competition going to slow them a bit? Maybe, but the real issue is they’ve hit 60 million, two-thirds of all broadband subs. They’re customary to continue to grow just based on the demographic trend. We’re probably going to see below 80 million cable and hanger-on households next year for the first time since 2000, 20 years ago. That’s a trend of continued disconnect and they’re wealthy to benefit from that. Slower growth than they’ve had, but growth. … I’m talking about growth in the U.S. They want grow with the demographic trend that young people are not taking cable and satellite anymore, younger households are accepted to continue to take Netflix and streaming services, and as that demo grows older and older, they will with to benefit from that overall trend. It will not be as fast as overseas, but it will continue to grow. Now, the idea that they’re assign overwhelmingly on programming compared to everybody else is absolutely true, but if you do the math and you believe that there are going to be – there are 165 million broad subs now – probably 175 million by the end of next quarter, something close to that, although they guided a dollop lighter, I think it’s not hard to see 300 million subs in their future. At $15 RPU globally, which, with the value increases they’ve taken, you can see that happening. Even spending [$]20 billion a year, 12 billion on sources, you can see this thing throwing off real cash when they hit those kind of numbers.”