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Netflix has emerged as one of the big winners during the COVID-19 era, reporting impressive results yesterday. The company added 15.77 million new subscribers globally in Q1, more than double its target and far exceeding the market consensus of 8.47 million. This brings Netflix’s total paid subscribers to 183 million.
First-quarter revenue also surpassed expectations, coming in at $5.77 billion. However, international revenue growth was somewhat hindered by the stronger dollar against other currencies. More than 50% of Netflix’s revenue in Q1 came from outside the USA and Canada.
Earnings per share (EPS) for the quarter were $1.57, slightly below the expected $1.64.
Looking ahead to Q2, Netflix forecasts that global paid subscriptions will increase by 7.5 million. The company projects revenue of $5.96 billion and EPS of $1.81. However, Netflix cautioned that predicting future subscriber growth remains challenging due to the coronavirus pandemic, describing its Q2 forecasts as “guesswork.” The shows and films slated for release in Q2 are still on track, as production had already been completed.
On the financial front, Netflix’s market capitalization has reached $185.60 billion. The price-to-earnings ratio stands at 102.41, with a price-to-sales ratio of 9.48.
Despite an impressive after-hours surge, Netflix shares started today’s session lower, down 3.19% at $420.23. NFLX has gained over 40% since the March lows, with the technical outlook turning bullish in early April after the price broke above the 50-day moving average.
On the downside, the first support level is at $418.30, today’s low. If NFLX breaks below this, the next support level would be $395, the low from April 14. A break below the 50-day moving average at $371 could negate the bullish momentum.
On the upside, immediate resistance is at $433, today’s high. The next resistance level is at $447.52, the high from yesterday’s trading session. Breaking above this could challenge the record high of $449.52.