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Summary
- Netflix reported higher revenue on a year-over-year basis in the fourth quarter of 2020. On the back of the robust growth, the company expects to halt its borrowing binge.
- The company signed up an unprecedented number of subscribers last year, driven by the COVID-19 caused lockdowns and stay-at-home environment.
- Netflix forecasts adding 6 million new users in the first quarter of 2021. Its stock climbed over 12 per cent in the extended trading hours on January 19.
Netflix Inc’s (NFLX:US or NASDASQ: NFLX) worldwide paid users breached the 200-million mark at the end 2020, the company announced on Tuesday, January 19. The world’s largest video streamer also anticipated that it no more needs to borrow for its production house.
In the fourth quarter of 2020, the online streaming company reported revenue of US$ 6.64 billion against US$ 5.47 billion in Q4 2019. However, its net income dropped to US$ 542.2 million, or US$ 1.19 per share, compared to US$ 587 million, or US$ 1.30 per share, in Q4 2019.
Let us delve into its stock performance and market fundamentals:
Netflix Inc. (NFLX:US or NASDASQ: NFLX)
Current Stock Price: US$ 501.77
Netflix stocks zoomed as much as 12.5 per cent to US$ 564.32 per share in the stretched trading session on Tuesday, led by higher subscribers and revenue in Q4 2020. The entertainment stock added approximately 48 per cent in the last one year.
Netflix expects to return excess cash to stockholders via the share buyback option. It estimates to hold a gross debt in the range of US$ 10 billion to US$ 15 billion. Its present debt-to-equity is 1.55, and earnings per share is US$ 6.20.
Stocks of the digital media-diversified company are delivering a return on equity of 32.64 per cent, with a price-to-cashflow of 204.70. Netflix’s current market value stands at nearly US$ 221.680 billion.
A Glance At Subscription Statistics
Netflix’s total subscribers touched 203.7 million, as per its latest financial statement. The communication giant that started its streaming operations in 2007, registered record subscribers in 2020, guided by audiences who stayed home amid the COVID-19 outbreak.
The company reported 83 per cent new subscribers’ growth from outside North America in the last year. The Europe, the Middle East, and Africa (EMEA) region added 41 per cent paid membership in 2020.
For the current quarter, Netflix anticipated it would add 6 million worldwide subscribers.
Meanwhile, rival Disney reported in December that it added 86.8 million viewers to Disney+ in one year.
