Shares of Netflix Inc. (NFLX - Analyst Report) reached a new 52-week high of $229.69 on Monday, May 13, 2013. The company has recently announced robust first-quarter results and provided a positive outlook.
The closing price of Netflix on May 13 was $229.38, representing a phenomenal one-year return of about 198.05% and a year-to-date return of about 149.3%. Average volume of shares traded over the last three months stands at approximately 4534.9K.
Netflix delivered a positive earnings surprise of 153.9% over the past four quarters. This Zacks Rank #2 (Buy) company has a market cap of $12.88 billion and a long-term expected earnings growth rate of 17.9%.
Robust 1Q for Netflix
Netflix reported first-quarter non-GAAP earnings per share (excluding loss on extinguishment of debt) of 31 cents which handily beat the Zacks Consensus Estimate of 18 cents per share. On a year-over-year basis, reported earnings also improved from a loss of 8 cents per share.
Total revenue increased 17.7% year over year to $1.02 billion and was marginally ahead of the Zacks Consensus Estimate. Robust subscriber additions in Netflix's streaming business (both domestic and international) led to the better-than-expected top-line performance.
Netflix management forecasts EPS between 23 cents and 48 cents. The Zacks Consensus Estimate for second-quarter 2013 is pegged at 39 cents. The company expects to expand its subscriber base for both its U.S. and international operations.
The company is also set to start a 4-stream plan, with subscription cost of $11.99 for its U.S. subscribers in the near term.
Following the second-quarter earnings release, the Zacks Consensus Estimate moved up to 39 cents from 26 cents in the last 30-day period. 12 estimates moved up while only one estimate moved down during the period.
Netflix has made significant amount of investments to diversify and improve its content portfolio that makes its streaming services distinguishable from other service providers. The improved content portfolio is expected to be incrementally beneficial for the company in attracting new subscribers as well as retaining the existing ones. Subsequently, these factors are expected to drive the company’s growth, going forward.
Other Stocks to Consider
Other stocks which provide online video services and are worth considering include, Amazon (AMZN - Analyst Report) and Time Warner Inc (TWX - Analyst Report) both of which carry a Zacks Rank #3 (Hold). Verizon (VZ - Analyst Report) has a Zacks Rank #2 (Buy).