Netflix Records Record Growth in the Second Quarter

Netflix’s stock hit an all-time high this week on Tuesday according to Hollywood Reporter. The online movie streaming application developer was lauded by Wall Street for surpassing all expectations for the second-quarter financial projections and increased subscriber growth. The article http://www.hollywoodreporter.com/news/netflix-stock-hits-all-time-high-1022010 asserts that Netflix’s shares traded 10.7% up at $178.92, establishing an incredible $77.1 billion market value as reported by CNBC.

This robust growth has been occasioned by an unusual increase in the number of new subscribers in the last quarter. Chief executive officer Read Hastings announced that Netflix’s new subscriptions had grown by 5.2 million, 2 million above the Wall Street projection of 3.2 million new subscribers over the same period. This prompted Bernstein Todd Juenger to adjust his projected target for the company to $203 for the last quarter. If the Netflix hits the subscriber growth target of 4.4 million in the fourth quarter, they will have brought the total gains for the first three-quarters of the year to 14.6 million according to Juenger. This is no mean feat.

As Juenger continues to write, even if Netflix fails to achieve its target for the last quarter, it would still have attained high growth over the first three-quarters of the year. It would still hit the 12 million mark with increased new subscribers, meaning that it would have achieved in just nine months what Hulu has been unable to produce over its seven year existence period. It would also have added the same number of subs in the second quarter as Starz, HBO, Showtime, and CBS have added in their entire lifetimes. That is what this news means once put into perspective.

Netflix has been able to attain this by keeping a strong online presence and creating targeted online marketing campaigns. It shows that the company has a greater potential market than expected and that it still has the potential for more significant growth in the coming years.