Netflix's stock price dropped more than 7% during early trading on Wednesday morning, a day after the company posted underwhelming Q1 subscriber growth -- and projected meager gains during the second quarter.
An hour into trading on Wednesday, Netflix shares were down 7.6% to $509.11 per share. Following the drop, Netflix shares are now down about 2.7% since the start of 2021.
The stock drop comes after Netflix reported on Tuesday afternoon it added 4 million customers between January and March, or about 2 million fewer than the company had projected. (The new subscribers pushed Netflix to 207.6 million subscribers overall.) Netflix, in its letter to shareholders, said the subscriber miss was due to a "lighter content slate" in Q1. The company also said the pandemic "pulled forward" its subscriber gains, meaning more people signed up in 2020 -- when a company-record 37 million people added Netflix accounts -- than anticipated, leading to the first quarter subscriber miss.
Another concern for investors could be Netflix's Q2 forecast. The company estimated it will add 1 million subscribers during the second quarter -- or about 4 times less than Wall Street analysts had projected. Netflix added it expects growth in North and South America to be "roughly flattish." Netflix said this is due to a few factors, including delayed productions.
Still, it wasn't all bad for Netflix from an earnings standpoint. The company topped Wall Street's earnings per share target of $2.98 by reporting EPS of $3.75, and sales of $7.16 billion matched analyst estimates. Netflix added it will be spending $17 billion on content this year and that it anticipates a strong second half to 2021.
For more on Netflix's Q1 performance, TheWrap looked into whether the streaming heavyweight needs to be looking over its shoulder at competitors like Disney+. You can see what several analysts had to say by clicking here.