The year-over-year increase in subscribers is “the key to sustaining valuation,” Barclays said in the note to clients Wednesday. Netflix crushed Wall Street’s expectation for subscriber growth when the company reported third-quarter earningsafter the bell on Tuesday.
“Given the miss last quarter, there was understandable worry going into earnings especially around” how many subscribers Netflix would add in the fourth quarter, Barclays said. “Any doubt about [Netflix’s] momentum should be assuaged given the guide.”
The company is projecting it will add 9.4 million net subscribers during the fourth quarter. “We’re getting a little better on the forecasting,” CEO Reed Hastings said after the earnings report. “I think by focusing going forward on paid [net adds] we’ll be able to be a little more accurate and focus on the fundamentals.”
Netflix rose 4.7 percent in trading to $362.88 a share. The stock has skyrocketed over the past 12 months, up 73.7 percent before Tuesday’s earnings report.
contributed to this report.