Nearly 14% of Netflix (NASDAQ: NFLX ) stock was sold short heading into the Q1 earnings report. The bad news for these bears: Shares rallied more than 20% (again!) after the streaming sensation reported blowout earnings.
Revenue climbed 17.7% to $1.02 billion while per-share earnings rose to $0.31, well above the $0.18 analysts were calling for. What's more, 3 million new members joined around the world, reaffirming Netflix's position as the leading streaming supplier, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following interview with The Motley Fool's Erin Miller.
Guidance also came in ahead of expectations, while revenue is expected to once again be around $1 billion or slightly above. Meanwhile, Coinstar (NASDAQ: OUTR ) and Verizon (NYSE: VZ ) are still trying to get traction for Redbox Instant as Hulu's owners struggle with a lowball offer for the service. Among competitors, only Amazon.com seems like a genuine threat. Call Netflix expensive if you'd like, but selling the stock short is just too dangerous, Tim says.
Can anyone beat Netflix? Please watch this short video to get Tim's full take, and then leave a comment to let us know whether you'd buy, sell, or short Netflix stock now, and why.
For further analysis of how Netflix is changing entertainment, tune into our newest premium research report, in which we take you inside Netflix's entertainment empire and tell you what the streaming sensation is really worth, and whether the stock deserves a place in your portfolio. Access your report now by clicking here.