Netflix share price jumped 2.5% in after-hours trading after it reported earnings that showed a massive spike in international subscribers. However, domestic numbers slumped, reflecting a gradual erosion of its domestic subscriber base by upcoming competition.
Netflix added 423,000 new subscribers from the domestic market (US and Canada), which fell short of its own expectations of 600,000 numbers. However, international subscription base grew by 8.3 million, which blew the estimate of 7 million new international subscribers out of the water.
Netflix now has a total paying subscriber base of 167 million users, with 106 million of these located internationally. Netflix’s revenue grew 31% year-on-year, but only marginally beat the estimate of $5.45billion to net in a revenue of $5.47billion. Earnings per share came in at $1.30, but there is no data for the previous earnings per share due to tax adjustments.
Netflix has immediately capitalized on the rapid increase in its international subscriber base by offering local currency payments in several countries, which will make it easier and faster for the company to get its subscription payments.
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Netflix share price continues to trade within the rising channel seen on the weekly chart. Netflix share price jumped to as high as $348.50 in after-hours trading after closing at 338.11. It is approaching the immediate resistance of 347.02, which is where the 23.6% Fibonacci retracement from the swing low of 8 Feb 2016 to the swing high of 18 June 2018 is located. This resistance must be breached before the upper channel border can be attained. Further resistance lies at 383.50, where previous highs of 29 April and 8 July 2019 are located.
On the flip side, failure to breach the 23.6% Fibonacci retracement could lead to a pullback towards the 313.97 price level which represents the point of intersection between the lower channel border and the lows of 13 August 2018 and 15 July 2019, as well as the high of 25 Nov 2019. A break below this area targets 295.74, which is where the 38.2% Fibonacci retracement makes its abode.