Netflix Bounces But Still Under Stress

Netflix’s stock has bounced back sharply from last year’s nightmare. But it may take some of Gob Bluth’s best illusions for the company to be profitable again anytime soon.

There’s little for Netflix shareholders to laugh about right now. On Monday, the company is set to report quarterly results that are likely to be grim.

Netflix (NFLX) shares have surged more than 50% this year, but they are still 65% below their all-time high from last July. Netflix, which had been a Wall Street favorite due to its stellar track record for growth, stumbled hard last year.

“Investors appear focused solely on subs growth, which will likely require elevated advertising spending. We expect management to chase subscriber growth at all costs, driving marketing spending ever higher,” Michael Pachter, an analyst with Wedbush Securities in Los Angeles, said in a report previewing Netflix’s first-quarter results.

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