Posted in: Business News
Published:
February 18, 2020 10:01 PM UTC

Netflix Smashes 52-Week High Even as Coronavirus Fears Ravage Stock Market

Netflix's stock price rallied to 52-week highs on Tuesday, as investors continued to rally behind the streaming company's strong quarterly earnings report.

  • Netflix’s stock price rose by as much as 2.4% on Tuesday en route to fresh 52-week highs.
  • The broader stock market was down roughly half a percent amid coronavirus fears.
  • Netflix faces intense competition in the online video streaming market, but its Q4 results showed a healthy pace of new subscribers added.

Shares of Netflix Inc. (NASDAQ:NFLX) surged to 52-week highs Tuesday, even as coronavirus fears triggered a broad slump in major equity indexes.

The video-streaming company is still benefiting from a better than expected quarterly earnings report that saw its total subscriber base grow to 167 million.

NFLX Stock Spikes

Netflix’s stock price peaked at $389.40 for a gain of 2.4%. The stock would eventually settle up 1.9% at $387.78, its highest level since June 2018.

Shares of Netflix rally to 52-week highs. | Chart: Yahoo Finance

The rally pushed Netflix’s market cap north of $170 billion where it ranks 33rd among active U.S. corporations.

Year-to-date, Netflix’s share price is up more than 18%.

The broader U.S. stock market declined sharply on Tuesday, as investors returned from an extended holiday weekend only to mull the latest developments around coronavirus. The large-cap S&P 500 Index declined 0.3%. Meanwhile, the Dow Jones Industrial Average plunged 165 points.

Stocks were under pressure over fears that China’s coronavirus epidemic would continue to spread. U.S. investment bank Raymond James Financial compared China’s handling of the coronavirus outbreak to the Soviet Union’s response to the Chernobyl nuclear disaster.

Netflix Remains Competitive

Heightened competition in the online video-streaming industry has put a dark cloud over Netflix’s growth prospects. It took Disney+ two months to add nearly 29 million subscribers, a feat that took Netflix years to achieve. (To be fair to Netflix, the video-streaming market was much smaller and far less developed when it launched more than a decade ago.)

Netflix managed to silence the naysayers in its latest quarterly earnings report, where it exceeded its previous guidance on subscriber growth. The company added more than 9 million subscribers for the quarter ending December. The vast majority of that growth came from international markets.

As Forbes recently highlighted, Netflix managed to grow its revenue by 128% between 2016 and 2019. While that pace will be difficult to maintain, its international streaming market shows no signs of slowing.

Analysts’ ratings of NFLX remain favorable, though the consensus suggests the stock has already exceeded its 12-month target. According to data compiled by Nasdaq, Netflix’s average 12-month price target is $380.23 based on 14 ratings.

Disclaimer: The above should not be considered trading advice from CCN.com.

This article was edited by Josiah Wilmoth.

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Last modified: February 19, 2020 9:47 PM UTC

Sam Bourgi @hsbourgi

Financial Editor of CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE, Yahoo Finance and Forbes. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com

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