It was a tale of two stories for Netflix according to Wall Street analysts. While the company posted first-quarter revenue that beat estimates, it also warned that it expected light second-quarter guidance.
Shares of the streaming giant plunged 9% in extended hours trading after the report Tuesday and opened up 1.56% Wednesday.
In a letter to investors, CEO Reed Hastings said the U.S. price increase contributed to churn, or customer turnover. Hastings also said he wasn't concerned about rivals' new streaming services.
Worries about churn are overblown according to analysts at UBS. "Chill about Netflix churn fears," analyst Eric Sheridan said.
"We see NFLX as a top pick as it capitalizes on the opportunity to be the global leader in streaming media & the competitive moat around its business widens (via a mix of content spend, marketing, & scale)," Sheridan added.