Netflix announced earnings after the bell Tuesday, the first FANG stock to report which could set the tone for the rest of the high-momentum growth stocks.
The shares fell 11% in extended trading after the company posted better-than-expected profit, though missed on subscriber growth. Netflix added 3.98 million global paid subscribers in its March-ended quarter, below the 6.2 million expected.
The shares have underperformed the market this year. The stock is up 2% in 2021, below the 10% gain for the S&P 500.
Still, content is king and Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, told CNBC’s “Trading Nation” earlier Tuesday that it still sets Netflix apart from its peers.
“Where Netflix is really shining is that their big bet on original content is paying off in the awards season, and I think that that’s one of the reasons that they’ll continue to add subscribers while subscriber exhaustion is starting to get high and you’re seeing cancellations of folks who just don’t want to maintain multiple accounts,” she said before the earnings Tuesday.
Netflix garnered 10 nominations for its original film “Mank” at this year’s Oscars, broadcasting this Sunday. Its other original programming such as “The Crown” and “The Queen’s Gambit” has also proven popular.
Mark Tepper, president of Strategic Wealth Partners, is also a fan of Netflix’s content slate.
“When you look at Netflix, it all comes down to subs added, churn and free cash flow, and they’re going to end up going positive free cash flow much earlier than expected and the one thing that drives all three of those metrics is obviously content,” he said during the same interview.
Tepper said Netflix has a competitive edge in the streaming space.
“When it comes to quality and quantity, I believe they really don’t have much competition,” he said. “Netflix is the go-to service in people’s living rooms by a lot and I don’t think that’s going to change.”
Disclosure: Lido Advisors and Strategic Wealth Partners hold NFLX.
