Investors have become accustomed to routine outperformance from the company that propelled the stock to a gain of more than 360% over the past three years, far outpacing media bellwethers like Walt Disney and even tech stalwarts Apple and Alphabet.<\/p>\n
<\/p>\n
It has garnered additional attention with the sweeping success of the animated “KPop Demon Hunters”.<\/p>\n
<\/p>\n
But since peaking in June, shares have ebbed 7%, a signal that investors are growing cautious about its lofty valuation and lack of details about subscriber growth. The company’s forward price-to-earnings multiple stands at nearly 40, far more than other media companies and major tech names.<\/p>\n
<\/p>\n
“Shares have enjoyed a strong run this year, so expectations were already high, and with the valuation sitting above its long-term average, there’s added pressure not just to deliver but to exceed,” said Matt Britzman, Senior Equity Analyst at Hargreaves Lansdown.<\/p>\n
<\/p>\n
Netflix forecast revenue of $11.96 billion for the fourth quarter, compared with Wall Street’s projection for $11.9 billion. Third-quarter revenue was roughly in line with forecasts, at $11.5 billion, according to London Stock Exchange Group data.<\/p>\n
<\/p>\n
The company has ventured into advertising and video games to diversify its revenue streams, but these businesses have struggled amid shifts in leadership and strategy, along with competition.<\/p>\n
For the third quarter, Netflix said it recorded its best ad sales quarter in history without disclosing a number.<\/p>\n
<\/p>\n
“Netflix must demonstrate soon that its ad program can accelerate growth to justify a sky-high multiple,” analysts at Wedbush said, calling the company’s latest guidance “underwhelming” after several quarters of standout results.<\/p>\n
<\/p>\n
–Reuters–<\/p>\n","protected":false},"featured_media":13505,"template":"","meta":{"_acf_changed":false},"news-type":[44],"class_list":["post-13504","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Netflix shares fell more than 8% on Wednesday, as the streaming giant's outlook for the coming quarter left investors nonplussed despite a strong line-up of shows that includes the final season of \"Stranger Things\".","published_date":null,"news_description":"Netflix shares fell more than 8% on Wednesday, as the streaming giant's outlook for the coming quarter left investors nonplussed despite a strong line-up of shows that includes the final season of \"Stranger Things\".","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/13504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/13504\/revisions"}],"predecessor-version":[{"id":18597,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/13504\/revisions\/18597"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/13505"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=13504"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=13504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}