"I think people expected a lot more revenue growth in the third quarter, plus there was the weakness in [average revenue per membership]," said analyst Michael Nathanson of MoffettNathanson.
Netflix stock sank more than 9% Thursday after a quarterly earnings report that was largely positive, but left Wall Street underwhelmed and uncertain about key revenue drivers.
Netflix's stock has risen on the rollout of ad-supported streaming and a new password sharing policy, which are both meant to boost revenue.
"Most of our revenue growth this year is from growth in volume through new paid memberships, and that's largely driven by our paid sharing rollout," Neumann said.
In a note following the earnings report, however, Cahall said "patience is a virtue," and called out investors that were "over-exuberant on paid sharing," noting revenue growth will take longer.
Persons:
Michael Nathanson, Spencer Neumann, Neumann, Wells, Steven Cahall, Cahall, Greg Peters
Organizations:
MoffettNathanson, Netflix, Wall Street, Hollywood