What happened

Shares of Netflix (NASDAQ:NFLX) fell 13.8% in July 2018, according to data from S&P Global Market Intelligence. The streaming-video veteran may have delivered solid second-quarter earnings last month, but that didn't matter, as investors focused on soft subscriber additions instead.

So what

On July 15, Netflix's second-quarter report showed 40% year-over-year revenue growth and skyrocketing earnings. At the same time, Netflix added just 5.1 million net new subscribers on a global level, 1.1 million below management's guidance. Netflix shares fell more than 7% the next day.

And last week, the stock took another 5% dive on reports that retail giant Walmart (NYSE:WMT) is thinking about a streaming service of its own. This lower-priced platform would use licensed third-party content geared at a solidly middle-America type of audience. The company should reach a yea-or-nay decision by this fall, but some Netflix investors got spooked and walked away.

Close-up shot of hand holding TV remote, with a blurred screen in the distance.

Image source: Getty Images.

Now what

I would argue that the subscriber miss, while regrettable, was a small speed bump and a normal consequence of Netflix's management sharing their internal goals instead of setting up an easy-to-crush kind of target. As for the Walmart project, it looks like this could exist and carve out a reasonable niche for itself without stealing a whole lot of business from Netflix. I'd be more worried if Walmart came out with original production plans and a billion-dollar content budget, but that seems unlikely.

Long story short: Netflix looks like a solid buy after a month full of misguided haircuts.

Anders Bylund owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.