×
You will be redirected back to your article in seconds

Netflix Shares Soar to All-Time High After Huge Subscriber Gains

Company's $32 billion-plus valuation makes it more valuable than CBS, Viacom, Dish, Twitter or Discovery

Netflix stock shot up more than 13% Thursday, hitting an all-time high of $541.43 per share in early trading, after the No. 1 subscription-video player packed on about 860,000 more streaming customers than expected in the first quarter of 2015.

The company added 4.9 million streaming subs worldwide in the period, including 2.28 million in the U.S.

Netflix’s big stock move gives it a market cap of more than $32 billion, making it more valuable — at the moment — than media companies including CBS, Viacom and Discovery Communications.

[UPDATE: 5:30 p.m. ET: Netflix shares closed at $562.05 per share Thursday, up 18% for the day. The company now has a market cap of about $34 billion; that makes it more valuable than Twitter ($33.2 billion) and Dish Network ($32.5 billion). Overall, the markets were down slightly Thursday.]

“Overall we view Q1 domestic streaming results as emphatically positive — exceeding revenue estimates and (perhaps more importantly) materially beating net sub adds expectations,” RBC Capital Markets analyst Mark Mahaney wrote in a research note.

With about 41.4 million U.S. subs and 21 million international customers, Netflix is “one of the largest global entertainment subscription businesses,” Mahaney added. “We believe that Netflix has achieved a level of sustainable scale, growth and profitability that isn’t currently reflected in its stock price.” The analyst maintained an “outperform” rating on the stock, with a price target of $600.

Netflix, for its part, attributed the strong subscriber gains to its growing programming lineup, including the Q1 launch of “House of Cards” season 3 and new shows “Unbreakable Kimmy Schmidt” (pictured above) and “Bloodline.” Another eagerly awaited original series, “Marvel’s Daredevil,” hit the service April 10, after the end of the first quarter on March 31.

The company’s original-content strategy is now fueling a virtuous cycle, driving up both gross adds and cutting churn, according to UBS analyst Doug Mitchelson.

“Netflix reminds us of ESPN’s virtuous cycle 15 years ago, when ESPN’s leadership allowed it to acquire more and better sports rights, helping drive strong growth off its leading revenue base and so on,” he wrote in a research note. That resulted in ESPN building an “insurmountable” edge over rivals: “ESPN spends more on sports rights than any other network, and also makes more money on sports rights than any other network.”

On the strong Q1 results, Cowen & Co. analyst John Blackledge raised estimates for Netflix subscriber gains for 2015 and beyond. This year, per his revised estimates, the company will add 6 million U.S. and 11 million international subs (up from the previous 4.8 million and 8.5 million, respectively). The analyst also raised his price target on the stock from $465 to $625 per share.

The most recent quarter stands in contrast to Netflix’s third quarter of 2014, when the company badly missed expectations on sub growth (gaining 3.2 million, 670,000 fewer than it had forecast). That pushed the stock down as much as 26%.

More Digital

  • Alibaba Buys 8% Stake in Chinese

    Alibaba Buys 8% Stake in Chinese Video Platform Bilibili

    Alibaba has purchased an 8% stake in the Chinese online video platform Bilibili, the official Xinhua news agency reported. Bilibili is one of China’s top video streaming and entertainment platforms, with about 92 million monthly active users and 450 million page-views per day. Founded in 2009, it was listed on the NASDAQ last March. Alibaba’s [...]

  • Clevver-Logo

    Hearst Magazines Buys Clevver's Pop-Culture YouTube Channels After Defy's Demise

    Hearst Magazines has snapped up Clevver, a network of female-skewing lifestyle and pop-culture news YouTube channels that had been owned by now-defunct Defy Media. Clevver was left homeless after Defy’s sudden shutdown in November; its principals said at the time they were looking for a new home. Hearst Magazines sees a digital fit with Clevver’s [...]

  • "Brother" -- Episode 201-- Pictured (l-r):

    CBS Interactive's Marc DeBevoise on Streaming Boom, Content Strategy, and Apple

    Not everyone wants or needs to be Netflix to succeed in the streaming space. And not everyone sees Apple’s enigmatic new service as a threat. Even as rival streaming services offer gobs of content, CBS Interactive’s president and COO Marc DeBevoise sees the company’s targeted original programming strategy continuing to attract viewers to its All [...]

  • Rhett-Link-Good-Mythical-Morning

    Rhett & Link's Mythical Entertainment in Talks to Acquire Smosh (EXCLUSIVE)

    Smosh, the YouTube comedy brand left stranded after parent company Defy Media went belly-up, may be about to get a new business partner. Mythical Entertainment, the entertainment company founded by top YouTube comedy duo Rhett & Link, has been in talks about acquiring the Smosh brand, sources told Variety. Multiple potential buyers came forward to [...]

  • Pokemon Go

    Proposed 'Pokémon Go' Lawsuit Settlement May Remove Poké Stops, Gyms

    A proposed settlement in the class action lawsuit against “Pokémon Go” developer Niantic could remove or change a number of Poké Stops and Gyms in the popular augmented reality game. The proposed settlement was filed in a California court on Thursday and applies to anyone in the U.S. who owns or leases property within 100 meters [...]

  • Skyline of Doha at night with

    Qatar's beIN Rallies Support From U.S. Companies Against Pirate Broadcaster beoutQ

    Qatari powerhouse beIN Media Group has rallied support from American sports and entertainment entities, including Discovery and Fox, behind its request that the U.S. government place Saudi Arabia on its watch list of top intellectual property offenders. The Doha-based broadcaster, a state-owned spinoff of Al Jazeera news network, accuses the Saudi government of harboring pirate broadcaster [...]

More From Our Brands

Access exclusive content