Netflix had mentioned that competition was unlikely to slow their growth during this quarter. Neither was it going to adversely impact their new subscribers. But with the recent turn of events, it has been seen that Netflix is losing its subscribers that things are looking to get back to normal after the pandemic.
On the other they have informed a slow production of TV shows and movies at the time of the pandemic has decreased the subscription growth in the 1st quarter of 2021. The shares of Netflix Inc. which is the largest streaming service across the world has dropped by almost 11% on 20th April, Tuesday.
Netflix Fails To Achieve Estimated Subscribers
Netflix managed to get approximately 3.98 million new subscribers from January to March 2021. However, they had estimated an average of 6.25 million as projected by the analysts of Refinitive.
As of now, Netflix is expecting 1 million subscriptions from new users during the 2nd quarter of this year. Analysts have estimated roughly 4.8 million new subscriptions.
The shares of this streaming service dipped 11% after the trading closed at $489.28. This resulted in losing $25 billion from their previous market capitalization. Their stock had spiked by 27% during the last 12 months, indicating an increase of 63% as compared to the Composite Index, a tech-heavy NASDAQ.
Moreover, the company believes that there will be significant growth in memberships in the 2nd half of 2021. This is mainly owing to the reason that new seasons of ‘Money Heist’, ‘The Witcher’ and ‘You’ are about to release among other highly anticipated shows and movies.
Netflix had $3.75 EPS earning about $1.71 billion that doubled as compared to last year. Revenue had surged 24% to reach $7.16 billion. The main question for the company is the COVID-19 situation and its impact globally. They are expecting on breaking even this year.