After Wednesday's earnings reaction, the stock boasts a return of 17% in the year-to-date, compared to a 20% return for Disney, 48% return for Apple and 15% for Amazon (AMZN) but the stock's reaction will have to be solidified before the drought is deemed over for Netflix and that may be hard given the gritty details of the quarterly report.
Netflix is counting on the unique lineup of award-winning TV shows and movies that it has amass since expanding into original programming six years ago to help it retain its competitive edge and attract more subscribers. Still, the company faces challenges.
Netflix shares climbed more than 10% in after-market trade.
Wedbush Securities analyst Daniel Ives said he is expecting Netflix to lose some of its appeal.
Netflix thinks everyone will be competing with broadcast: According to Netflix, upcoming streaming services from Disney+ and Apple TV+ will simply mean that all streaming services will compete with broadcast.
Netflix's third quarter results were out on Wednesday.
CEO Reed Hastings downplayed the widely reported threat that new streaming services pose, saying that none of the new services like Disney+ and HBO Max represent a "big change" in the competitive landscape.
"Netflix has never faced this level of competition from a new entrant", he wrote.
Trump says Syria border clash not a US concern
Vice President Mike Pence and Secretary of State Mike Pompeo will travel to Ankara to meet with Erdogan, Trump said on Wednesday. The US president has repeatedly warned Turkey not to " slaughter " the Syrian Kurds, promising to cripple the country's economy.
"Since our US price increase earlier this year, retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower USA membership growth", the company said in an investor note on Wednesday.
"The launch of these new services will be noisy", the company said in a press release. "Retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower USA membership growth", it said.
The company has downgraded its forecast for total subscriber adds in 2019 by almost 2 million from what it had predicted at the start of the year. In July, Netflix had launched a mobile-only plan for India costing Rs 199 per month to increase subscribers.
Netflix said its additional revenue would allow it to continue to invest "to further strengthen our value proposition". That topped Wall Street's concensus target of $1.04.
Bank of America Merrill Lynch analysts said in a note previewing the third quarter earnings that the results would be a "make or break quarter for confidence in Netflix's structural growth". It's worth noting that global revenue has overtaken USA revenue over the past year; both stood at 1.9 billion in Q3 2018, and now worldwide revenue is $2.7 billion, and U.S. revenue is $2.4 billion.
The debt that Netflix has amassed has sparked concern among some investors.
Netflix is expected to spend about $16 billion in content this year, a number that is expected to grow to $35 billion in 2025, according to Pivotal Research.
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