After the July quarterly report, Netflix shares grew by 22%, and they have been traded between $220 - $251.5 since then.
The company's revenue for the previous quarter was $7.97 billion, which slightly fell short of investors’ expectations of $8.03 billion. On the plus side, earnings per share exceeded forecasts of $2.95 and amounted to $3.2.
The next report will be introduced on October 18.
In light of recent events, which are:
* Atlantic Equities raised the rating from "neutral" to "overweight," assuming growth due to upcoming implementation of the ad-supported tier;
* raising target value from $211 to $283 by analyst Hamilton Faber, who is convinced the company's stock is undervalued. He believes that advertising can increase revenue by $6.7 billion over the next three years. Moreover, the average revenue per user can be $26 per month, which exceeds the Disney's average revenue more than three times due to the company's higher audience;
* Citigroup and Oppenheimer analysts raised their share price targets, also believing in the success of advertising implementation.
Netflix’s shares have moved into the growth stage, and so far there are no obstacles to its continuation, except for the tense situation in the world.
Thus, the break of the upper limit of the trading range of 251.5 is likely to happen as well as the continuing rise of shares' price.
Trading Strategy:
1. Buying from the market with targets;
Take Profit 1 = 264,
Take Profit 2 = 271,5,
Take Profit 3 = 283
Stop Loss below 231.
2. Buy in case of rollback to 240 with targets;
Take Profit 1 = 251,5,
Take Profit 2 = 264,
Take Profit 3 = 283
Stop Loss is also below 231.
Remember the spread and money management rules!
Warning!
Trading on financial markets involves a high level of risk and may lead to the loss of investment capital. The MarketCheese team is not responsible for the possible loss of your investment funds.
This content is for informational purposes only and is not intended to be investing advice.
