Shares of Netflix NFLX surged 5.36% during regular trading hours Wednesday amid its struggle to regain momentum. So, let’s see what had Netflix investors so excited to help decide if now might be time to buy Netflix stock on the dip.
Buckingham Research on Monday raised its Netflix rating from “underperform” to “buy.” The firm gave the streaming giant a double upgrade on the back of its discount and its position as a top internet TV platform. "We have always viewed Netflix as the continued top streaming category winner," analyst Matthew Harrigan wrote Monday.
Buckingham also upped its Netflix price target from $349 per share to $406 per share. It is worth noting that the firm pointed to Netflix’s 27% decline from its summer highs as the “primary upgrade catalyst."
On top Buckingham’s buy on the dip-based upgrade, Netflix announced Tuesday a new lineup of animated programming. The company said it would roll out six, all-new projects animated projects, including movies and original series. Netflix noted that nearly 60% of its members watch kids and family content every month.
There has been little Netflix news over the last few days aside from Buckingham’s upgrade and its new slate of animated offerings. Therefore, it seems that investors might be thinking seriously about the idea of buying Netflix stock on the dip.
Netflix stock had soared until its now infamous Q2 subscriber miss, with its shares still down nearly 23% from its 52-week high of $423.21 per share as of Wednesday. Yet, Netflix added a total of 7 million subscribers during the third quarter. This blew away its own subscriber growth projections by roughly 2 million and set a new Q3 record.
The streaming firm ended the quarter with 137.1 million subscribers worldwide, up roughly 25% from the year-ago period’s 109.25 million. And Netflix doesn’t expect this growth to end. The company projected that it will add 7.6 million paid users and 9.4 million total subscribers in Q4.