Netflix Stock Jumps Day After Strong 4Q Earnings Report

Analysts are “incrementally bullish” after Netflix reports that subscribers have returned to the fold

Netflix stock surged Thursday on the strength of the home entertainment giant's bullish fourth-quarter earnings. 

Shares of the company rose 22 percent over the course of trading, ending the day at $116.01 a share. 

Also read: Netflix Subscribers Edged Back Up in Q4 — Has It Turned the Corner?

It's a welcome turnaround for Netflix. The company has endured subscriber outrage and defections since  raising prices on its most popular subscription package last summer and attempting to spin-off its DVD-by-mail business into a separate company called Qwikster.

Netflix abandoned its Qwikster ambitions last winter, but that did nothing to bolster its plunging stock price, which was as high as $300 in July. 

Also read: Netflix CEO Reed Hastings: 'We Expect DVD Subscribers to Decline Forever'

What a difference a quarterly earnings report can make. 

Investors are looking more favorably on Netflix after the company said Wednesday that it  has gained more than 600,000 subscribers in the fourth quarter — nearly replacing the roughly 800,000 members that left its rolls during the previous earnings period. 

In addition, Netflix trounced Wall Street’s expectations for the period, reporting profits of $41 million or 73 cents per share, on $876 million in revenue. Analysts had projected earnings of 54 cents a share and $857 million in revenue.

"We are incrementally bullish on shares of Netflix following the 4Q results," Arvind Bhatia, an analyst with Sterne Agee, said in a note.

Netflix's recovery may be incremental, but it's better than a few months ago when it was nearly left for dead.  

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