By Felicity Duncan
Among the so-called tech giants that have driven the nine-year bull market, Netflix has always stood out as something of an oddity. Unlike Facebook, Google, Amazon, and Apple, Netflix isn’t a powerhouse, really. Yes, it’s the world’s biggest and fastest growing streaming service, but it has been burning cash fast and it has a history of patchy growth. When it missed its targets in the second quarter, the stock took a beating.
Today, Netflix will report earnings. Analysts are assuming that the company will hit all of its forecasts, including 5.32 million new subscribers. But the market is also a little jumpier now than it was mid-year. Last week’s sell-off has made some people a little jittery. And if Netflix doesn’thit its targets, it’s possible that there will be a significant sell-off in the stock. If that happens, that should underscore that what we’re seeing is definitely a pull-back on valuations that appear to have grown faster than earnings. In the end, fundamentals really do matter.
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In Premium today, you can listen to Alec Hogg interview Cyril Ramaphosa’s biographer Anthony Butler. You can learn about the recession warning bells that are ringing in the global economy. And you can read about the risks that Saudi Arabia’s problems pose for the already-high petrol price.
