Netflix deserves good thing about the doubt, regardless of subscriber slowdown

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Netflix deserves benefit of the doubt, despite subscriber slowdown

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CNBC’s Jim Cramer got here to Netflix’s protection Wednesday after shares of the streaming big bought off on its first-quarter report.

The inventory plunged greater than 7% for the reason that report got here out after Tuesday’s shut, regardless of the corporate beating estimates on the highest and backside traces. Investors have been upset by softer-than-expected subscriber progress and an unsure future within the quick time period, Cramer famous.

“After the incredible performance this company’s given us over the years, you’ve gotta remember that doubting Netflix has been a mistake every step of the way,” Cramer mentioned on “Mad Money.”

Netflix reported having 208 million paid subscribers on the finish of March, a 14% improve from a 12 months in the past however wanting the 210 million determine the corporate anticipated.

Despite the dip in subscriber progress, CFO Spencer Neumann mentioned on the convention name that “business remains healthy,” engagement is rising and buyer turnover is declining.

“To me, that says ‘please, don’t panic’ … I think they’ll find a way to jumpstart new sign-ups with must-see content, whether they create it themselves or have to license it from someone else,” Cramer mentioned. “In other words, I am giving Netflix credit for something that doesn’t exist yet, something that will make us feel compelled to subscribe despite all the competition.”

Earlier Wednesday, Cramer mentioned Netflix inventory may probably drop to $490 a share, although he stays bullish in the long term. Netflix shares completed at $508.90 on Wednesday, down 14% from their peak commerce in January.