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Netflix Stock Crashes As Investors Head For The Exits After Earnings Report

Netflix stock lost more than one-fifth of its value early Friday after the internet television network missed its own target for new subscribers in the fourth quarter and guided much lower than views for the current quarter.




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In premarket trades on the stock market today, Netflix stock tumbled 21.5%, near 399. Netflix stock has been in a steep decline since late November amid concerns about slowing growth. It hit an all-time high of 700.99 on Nov. 17.

Los Gatos, Calif.-based Netflix late Thursday said it added 8.28 million new subscribers in the December quarter, just missing its goal of 8.5 million. For the current quarter, Netflix forecast adding 2.5 million new subscribers. However, analysts had predicted 5.8 million net adds in the first quarter.

On a positive note, Netflix delivered better-than-expected profit on in-line sales for the December quarter.

Wall Street Sours On Netflix Stock

Netflix earned $1.33 a share on sales of $7.71 billion in the fourth quarter. On a year-over-year basis, earnings rose 12% while sales climbed 16%. Analysts had predicted earnings of 83 cents a share on sales of $7.71 billion.

For the first quarter, Netflix expects to earn $2.86 a share on sales of $7.9 billion. That would translate to a 24% decline in earnings year over year on a 10% increase in revenue.

Several Wall Street analysts downgraded Netflix stock following its fourth-quarter earnings report. Many slashed their price targets.

Netflix ended 2021 with 221.8 million subscribers worldwide, with 34% of those in the U.S. and Canada.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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