Netflix (NFLX) investors are cheering Blockbuster’s long-expected bankruptcy as shares of the online DVD rental firm rocketed up 6 percent on news that Blockbuster Inc. (BLOKA) — a co. smothered under $900 million in debt — is preparing to file for Chapter 11 bankruptcy within the next few days.
Netflix stock, which has gained $8.00 a share and is trading at $155.89, continues to display strength and remains entirely unfazed by the market’s broad based weakness as it stages a modest push to fresh highs.
Another cheerful news today for NFLX investors was the co.’s announcement of its aggressive Canadian expansion. The Los Gatos, Calif.-based Netflix confirmed launch of Canadian service for streaming movies and TV episodes over internet, streamed from Netflix to TVs and PCs for only $7.99 a month. The Canadian introduction marks the first availability of the co.’s service outside the U.S.
Needless to say, Netflix stock remains on a tear from a technical standpoint. The stock is trading safely above a strong support line, and it is in a newly created uptrend channel. The stair-stepping chart will certainly have its share of volatility, but the trend is definitely going in the right direction. If you take a look at PPS action recently ; NFLX shares broke through the upper end of their recent trading channel on significant volume. It remains to be seen however, if we will get any kind of significant follow-through on this breakout given the general fragility and whippiness we’ve seen in the markets lately. Having said that and considering Netflix expects continued growth in the market space it’s in because market penetration still remains relatively small, higher-highs by NFLX shares are to be expected.
In terms of Netlix’s key measurements ; it doesn’t hurt that the $8.2 billion market cap co. has been doing fundamentally well lately. Netfilx has raked in more than $1.8 billion revenue-wise trailing twelve. The co.’s profitability margin remains at 7.2%, while its ROA and ROE print 22.88% and 54.63, respectively. Year-over-year quarterly growth stands at 27%.
Netflix gained $8.80, or 5.98 percent, to $156 at 3:13 p.m. ET in Nasdaq composite trading.