Netflix Inc (NFLX)

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Netflix's Strong Fourth Quarter and What We're Watching Now
By: Motley Fool | February 8, 2021

• After handily beating analysts' expectations, what's next for the streaming content king?

When Netflix (NASDAQ:NFLX) reported its fourth-quarter earnings, the company surprised investors with its subscriber growth and other important metrics, and the stock jumped to an all-time high. But what about in the post-pandemic world? In this Fool Live video clip, recorded on Jan. 25, Fool.com contributors Brian Withers and Jason Hall discuss the latest results from the streaming video giant and what they're keeping an eye on in 2021 and beyond.

Brian Withers: Netflix. Netflix leaped to an all-time high. If it couldn't get any higher, investors were excited with their earnings released last week. The growth of the new viewers exceeded expectations around 8.5 versus the expectation of 6 million. They hit 200 million users for the first time. Reed Hastings got his steak from Denny's and ate it at home. [laughs] Steak to go to celebrate. [laughs] The multi-billionaire gets steak from Denny's. I just don't understand, but hey. [laughs] The big news that what everybody was excited about, not only was just the continued growth, is they're going to expect to be cash flow neutral in the coming year, which is fantastic because they're not going to need new sources of cash to fund growth or their new content which was for a long time a bearish tick on Netflix. Growth slowed down a little bit, it was around 21.5% versus 30% from a year ago. But to me, it's a 23-year-old company, $25 billion in trailing-12-month sales and growing at 20% plus. Absolutely amazing. What to watch going forward? [laughs] What to watch? You need to watch Netflix original content of course. Stranger Things, Mindhunter is really interesting look at FBI and they're tracking a serial killers. My wife and I are right now hooked on Peaky Blinders. We're on season 3, we're right in then middle we're binging on it. It's an awesome show and the Netflix original content is just top-notch. It really will keep customers around for a long time.

Jason Hall: There's a couple of things I'm watching with Netflix. Yeah. No. 1, it's great that they're at the point where their cash flows are going to support their continued development. Because the bottom line is they're still going to have to spend a ton of money on that development. There's just no getting around that at all.

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