Netflix Posts Strong Subscriber Growth; Shares Pricey
We're raising our fair value estimate to $90 per share, but still see shares as expensive amid projections for accelerating free cash flow burn.
Netflix reported better-than-expected subscriber growth in both the international (6.36 million net adds versus guidance of 5.05 million) and U.S. segments (2.00 million net adds, versus guidance of 1.25 million). Management once again attributed the net add outperformance to excitement around original content and the continued adoption of streaming video. Netflix continues to expand its streaming base, ending the quarter with more than 110.64 million global paid subscribers, up from 89.09 million a year ago.
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