We joined TDA Network’s Morning Trade Live on Thursday, October 17 to provide insights into Netflix’s earnings, competition, and valuation.
Don’t rush to buy Netflix after its 3Q19 earnings report. This earnings “beat” is an illusion and the byproduct of delayed marketing expenses and a one-time foreign currency gain. See the Harvard Business School paper that shows how these non-operating items create market inefficiencies here.
Instead of paying attention to misleading earnings, investors should focus on the slowing subscriber growth, negative free cash flow, and significant expectations baked into the stock price.
This article originally published on October 17, 2019.
Disclosure: David Trainer, Sam McBride, and Kyle Guske II receive no compensation to write about any specific stock, sector, style, or theme.
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