Netflix, Inc. (NFLX) continues to build on its 5-month rally, posting impressive first-quarter results on Apr 23 that gave its share price a nice little boost.

Company Description

Netflix, Inc. provides online and home delivery movie rental services in the United States. The company was founded in 1997 and has a market cap of $2.7 billion.

First-Quarter Results

Netflix stepped up to the plate on Apr 23 and reported excellent first-quarter results that were ahead of expectations. Revenue was up 21% from last year to $394 million. Income came in at $22.4 million, a big jump from last year’s $13.3 million, producing earnings of 37 cents per share, 5 cents ahead of the consensus estimate.

Netflix noted that its strong results were driven by adding 920,000 customers during the quarter, bringing its total subscriber base to 10.3 million.

Consistent Results

It was the fourth time in the last four quarters that the company has surprised and beat the consensus, having done so by an average of 3 cents, or 9%.

Kiosk Competition

There is no question that Netflix’s success is built upon value and convenience, surging ahead of less effectively positioned competitors like Blockbuster and Hollywood Video. But the company is not without its own competition, with CEO Randy Hastings noting that a growing number of people have canceled their Netflix subscriptions in favor of the red kiosks located at grocery stores that rent DVD’s for $1. Hastings reinforced this sentiment, saying that “By the end of the year, kiosks will likely be our number one competitor as video stores fall inversely.”

Estimates

Once again, analysts have raised their earnings guidance, with the current-year climbing 11 cents in the last 7 days to $1.72 per share. The next-year estimate is pegged at $2.09, a 22% earnings growth projection.

The Chart

Shares of NFLX have been on a very steady rally for most of the last 5 months, advancing from the mid $18’s to a recent high above $50. Valuations may be a bit pricey right now but this is a company that is posting impressive growth numbers in a very tough market. Take a look at the chart below.

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