At times, the market’s reaction can diverge from the underlying business performance, and Netflix (NFLX) just experienced that. The streaming giant released its Q1 numbers last week. And despite impressive revenue and margin growth, the stock slipped as investors focused on a softer outlook, timing of subscription price hikes, and a mix of moving pieces – from its ties with Warner Bros. Discovery (WBD) to leadership shifts involving Reed Hastings. Investors were expecting more, and the gap between expectations and guidance triggered a sharp pullback in NFLX stock.
But not everyone sees this as a red flag. Doug Anmuth of JPMorgan is not too worried about the recent dip in NFLX stock. He believes the company is still executing well and has plenty of room to grow. The analyst points to record engagement levels, saying Netflix’s content is doing a strong job keeping users hooked and driving retention.
