Are Netflix's Growth Days Over?
For years, Netflix (NASDAQ: NFLX) was one of the most reliable growth stocks on the market. The video streamer would regularly deliver brisk subscriber and revenue growth every quarter as it disrupted the massive video entertainment industry.
That's starting to change now. In its second-quarter earnings report, Netflix reported its slowest quarterly subscriber growth in the streaming era with just 1.5 million new member additions. In North America, it actually lost 430,000 members, showing it may be reaching a saturation point in its biggest, oldest, and most valuable market. Management blamed the COVID hangover as Netflix had record sign-ups in the first half of 2020 due to the pull-forward effect of the pandemic, and COVID-related production delays have slowed down new content in the first half of this year.
Revenue growth came in at just 19.4% to $7.34 billion, the first time top-line growth was below 20% in nearly a decade. Moreover, the company's third-quarter guidance indicates that revenue growth will continue to decelerate, with management forecasting just 16.2% top-line growth for the current quarter.
Source Fool.com
