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Jacob Sonenshine: Netflix investors liked the earnings that they saw, but there were some real holes. Let's get to the results real quick. First, earnings per share, beat estimates. Subscriber growth beat estimates, especially in the international market broadly, which is really important for Netflix. The stock rose 7% but there were some real holes. Let's get to those holes. They were on the guidance, quarter for subscriber growth. You're looking, management is looking for 7.6 million subscribers added in the fourth quarter, but that's not just a slight miss. That's against analysts' expectations of 9.5 million. Earnings per share, management looking for 51 cents. Analysts looking for 81 cents revenue guided 5.4 billion for management. Analysts were looking for 5.5 billion, so it wasn't just the guidance miss, but it was the magnitude of the guidance miss. Now you have an RBC capital markets' analyst, Mark Mahaney lowering his price target to 420 a share from 450 a share mentioning the guidance and management mentioned that competition from Apple, Disney didn't mention those companies, but that's where the competition is coming from, was weighing on the guidance. Now positive is a shareholder was telling me that management will guide conservatively, especially as of a rough second quarter a few months ago. But again, the magnitude of the guidance miss was there, and you know you're going to get some skepticism for sure. And you saw it from the RBC analyst.

Real Money Stock of the Day Netflix (NFLX - Get Report) investors were impressed with the streaming giant's earnings print Wednesday afternoon, but there were some glaring holes that are almost sure to cause some skepticism.

The stock rose 7.69% to $308.30 a share Thursday after the company beat expectations on subscriber growth and earnings. Netflix posted global net paid subscriber adds for the third quarter of 6.8 million, bearings expectations of 6.7 million. Earnings per share came in at $1.47 against estimates of $1.03.

But there were some holes.

Guidance across the board and management commentary on expectations were nothing like the actual quarterly results.

Management forecast global subscriber growth for the fourth quarter of 7.6 million, missing analysts hopes of 9.5 million. Management is looking for revenue of $5.4 billion, versus expectations of $5.5 billion. Earnings per share is forecast at 51 cents, against analysts hopes for 81 cents.

Netflix management can be known historically for issuing conservative guidance - although it evidently hasn't done so of late - and one Netflix shareholder told TheStreet the company would rather undershoot expectations in the near term so as not to disappoint investors. "There were not a lot of bulls leading into this" and investor sentiment was "very poor," said Ryan Giannotto., director of research at GraniteShares.

But the magnitude of the subscriber guidance miss was large, as the miss was to the tune of 20%. The EPS guidance miss was a 37% disappointment. 

RBC Capital Markets analyst Mark Mahaney lowered his price target to $420 from $450, noting the rising competition Netflix faces. 

And Netflix addressed just that in the earnings print, saying  "we have tried to factor that [competition] into our guidance." Management said "the launch of these new services [from competitors] will be noisy. There may be some modest headwind to our near-term growth." Apple (AAPL - Get Report) is launching Apple TV Plus for $4.99 a month, Disney (DIS - Get Report) is launching Disney Plus for $6.99, Comcast (CMCSA - Get Report) has been clear about its streaming ambitions using Sky TV, and Amazon (AMZN - Get Report) remains a threat with Prime Video. 

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