What Will It Take to Keep Netflix Shares Afloat on Monday?

Netflix (NASDAQ: NFLX  ) has an important first-quarter report coming up. An early rise in 2012 was undone by seasonal weakness over the summer, and soft guidance in that year's April report triggered that plunge.

What's different this time? What will it take to keep Netflix shares north of a 75% year-to-date rise -- and should investors even root for that?

In this video, Fool contributor Anders Bylund explains what will move Netflix stock on Monday, perhaps opening a juicy buy-in window.

The tumultuous performance of Netflix shares since the summer of 2011 has caused headaches for many devoted shareholders. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

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  • Report this Comment On April 21, 2013, at 10:22 PM, AceInMySleeve wrote:

    Interesting that you commented on advertising. Are you sure that it was abnormally high?

    I noticed a large jump in google trends for some international locs that declined again when the quarter ended. I think they pumped up ad spending. Not sure what that means. Plausibly to push numbers into guidance.

    It's tough to second guess Netflix's guidance. They gave it 3 weeks into the quarter, and those 3 weeks are the most significant seasonally of the entire quarter. They didn't know what HoC would do, but I'd be surprised if it moves the needle much as it's just a fairly small part of the service's value.

    When Netflix was DVD-only, the first quarter was substantially better than fourth quarter (to the tune of +35% gross adds Q/Q). Before Qwikster it was as well but they were ramping rapidly into streaming so seasonality rode on top of a secular increase. After Qwikster you had the impact of churn from that decision and the numbers went haywire. So it's very difficult to ascertain seasonality at this point in streaming. Netflix is forecasting a 15% drop in net adds Q/Q. I think Q4 becomes relatively stronger in streaming world because people join from Xmas gifts more rapidly than for DVD (since you can start viewing instantly).

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