Netflix Stock Jumps After Record Q4 Subscriber Growth—Monitor These Key Levels

Netflix, Inc.

Netflix (NFLX) shares surged over 10% in pre-market trading Wednesda after record subscriber growth fueled the streaming giant’s fourth quarter revenue. The company added 13.1 million subscribers in the December quarter, significantly above Wall Street expectations, taking its total paid membership count to 260.8 million. While the streamer added 1.2 million U.S. sign-ups, the binge on subscription growth came internationally from Europe and Asia. Revenue for the period, which improved 12% from a year earlier, came in at $8.83 billion, also surpassing the consensus forecast. Netflix also credited a curb on password sharing and the introduction of a $6.99 advertising-supported subscription for boosting the top line.

The company’s fourth quarter net income (NI) of $937.8 million, or $2.11 per share, fell short of estimates, but its projected first quarter 2024 earnings of $4.49 a share came in above the $4.10 figure analysts had forecast. In addition, Netflix bumped its full-year 2024 operating margin forecast to 24%, up several percentage points from its prior guidance of 22% to 23%. 

The company flagged further opportunities by continuing to broaden its programming slate, such as its recent foray into live entertainment, and tapping into new areas such as gaming and advertising. “We know ad dollars follow engagement. We’ve got the most engaged audience so we believe we’re well positioned to capture some of that ad spend that shifts from linear to streaming,” Netflix co-CEO Greg Peters said during the earnings call.

The NFLX share price sits poised to break above an ascending triangle on Wednesday—a chart pattern that indicates a continuation of the current long-term uptrend. However, the stock may need to retest the triangle’s top trendline before potentially making another move higher. If the stock continues its upward momentum in the coming weeks, it’s worth monitoring the $700 level, where the price may encounter resistance near its November 2021 all-time high.

Netflix shares were up 10.2% at $542.20 in pre-market trading at around 7:00 a.m. ET. As of Tuesday’s close, the stock had gained 35% over the past year, though it was little changed over the past month.

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As of the date this article was written, the author does not own any of the above securities.