Nasdaq: Netflix shares jump as added subscribers top forecasts

[MongiIG]

Netflix shares jumped in extended trading yesterday to set a fresh nine-month high, despite posting a big miss on earnings, as investors reacted positively to better-than-expected subscriber additions.

 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 20 January 2023

Netflix earnings

It's been a volatile 24 hours for Netflix shares coming off the back of earnings that provided a little bit of something for everyone.

That's because the bears got something, where we saw essentially underperformance in terms of earnings, earnings per share (EPS) coming in at 12 cents per share versus 59 cents expected, while revenues were broadly in line at $7.85 billion.

However, we saw significant upside in the stock and that's because the focus was on subscriber numbers. They added 7.66 million subscribers in the fourth quarter (Q4) against Wall Street forecasts of 4.57 million. So significant outperformance.

CEO steps down

Another major thing to note is we did see the co-founder, Reed Hastings stepping down as chief executive, handing the reins to co-CEO Ted Sarandos and chief operating officer, Greg Peters.

But despite the games that we've seen yesterday, we've started to see things turn around a little bit here, notably on the weekly timeframe, rallied into this 76.4 Fibonacci at 34131. And then as we see here on the daily time frame, the opening of the all-sessions move for this market has seen it coming off somewhat.

So as things stand respecting that 76.4 Fibonacci level, so could we see a bit of a pullback as people start to focus away from those subscriber numbers and instead on the underperformance, on the earnings figures?