Netflix (NASDAQ: NFLX) stock price has been struggling to generate sustainable growth amid trader’s concerns over increasing market competition. The impact of market competition has started impacting NFLX subscriber growth and financial numbers.
The streaming company missed fourth-quarter subs growth by a wide margin. Traders are blaming the entry of Disney and Apple in the streaming market for lower than expected growth in U.S. subscribers.
Netflix stock is trading around $338 at present. Although NFLX share price bounced in the past couple of months, the market analysts are seeing limited upside ahead. This is because of market competition from several new players.
Netflix Stock Plunged after Subscriber Growth Miss
Its Q4 U.S. and Canada streaming additions stood around 550K, down from the consensus estimate of 611K and guidance for 589K. The U.S. net adds came in at 420K in the final quarter.
On the positive side, the company generated robust growth in International streaming additions during the fourth quarter. The International streaming additions jumped 8.33M in Q4 compared to guidance for 7.0 million. In addition, its Q4 U.S. streaming margin rose to 39.3% while the international margin was standing around 17.1%.
Greenlight Capital looks bearish about Netflix’s future growth potential. The firm said, “We believe this narrative is finally coming to an end. NFLX is no longer the only value-priced streaming VOD provider. There are now a half-dozen subscription services and in the coming year there will be additional credible entrants with deep content libraries.”
Financial Numbers are Still Improving
The company has been generating robust financial growth over the years. Its fourth-quarter revenue grew 27% from the year-ago period. Moreover, it expects revenue growth in the range of 26% for the first quarter of 2020. NFLX has also generated a huge increase in earnings. Its full-year operating income surged by 62% year over year to $2.6 billion. On the negative side, the company provided lower than expected subscriber additions for 2020.