Netflix stock sees new peak amid high hopes for ‘Squid Game’ return
Global News
Streaming giant Netflix projected higher sign-ups for the last three months of the year when the hit South Korean drama 'Squid Game' returns.
Netflix shares hit an all-time high on Friday, buoyed by investor optimism that its robust content lineup will help the streaming giant maintain upbeat subscriber growth even as the boost from its password-sharing crackdown wanes.
The company, widely seen as the winner of Hollywood’s streaming wars, saw its stock rise nearly 10% and was set to add more than $28 billion to its market value of about $295 billion, if gains hold.
It topped estimates for quarterly subscriber additions by more than 1 million and projected higher sign-ups sequentially for the last three months of the year when South Korean drama “Squid Game” returns.
The company’s profit and revenue also beat estimates, a positive sign for its efforts to shift investor focus away from subscriber growth amid what some analysts see as an inevitable slowdown in sign-ups after the success of its password-sharing curbs.
The 5.1 million users Netflix added in the third quarter were below the 8.76 million additions in the year-ago period.
“The third quarter showed the slowdown in subscriber growth that we’ve been expecting, but Netflix has other areas of opportunity to continue boosting its financial performance,” Morningstar analyst Matthew Dolgin said.
Part of the push includes price increases. After increasing fees in Japan, the Middle East and Africa as well as parts of Europe in recent weeks, Netflix is hiking prices in Italy and Spain, and some analysts expect a similar move in the U.S. next year.
“Netflix did not announce any price change, though (it) did hint that there is room to take price with stronger engagement,” Bernstein analysts said.
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