Netflix stock climbed 7.24% Thursday, its best trading day of the year.
The gains come two days after Netflix reported fourth-quarter earnings that saw the company beat on the top and bottom lines for the quarter, but gave disappointing guidance for the first quarter of 2020. While the company failed to meet expectations on new subscribers in the U.S. and Canada, it exceeded expectations for new international subscribers.
The stock climbed as much as 2.3% in after-hours trading following Tuesday's earnings report, then fell about 2% on Wednesday.
Tuesday's earnings report was Netflix's first since streaming competition has picked up. Disney and Apple both launched their own streaming sites, Disney+ and Apple TV+, in November. The sector will only become more crowded as AT&T's WarnerMedia launches HBO Max in May and Comcast's NBCUniversal rolls out Peacock in the U.S. on July 15.
Investors remain divided on how Netflix will fare as competition heats up.
Despite the dour earnings report, Guggenheim Partners raised its price target on Netflix Thursday from $400 per share to $420 per share, citing strong global subscriptions growth in the fourth quarter of 2019. The firm has a buy rating on the stock.
"Annual viewing per member grew both globally and domestically 'consistent with recent quarters' – both of which support our confidence in Netflix's multi-year, global subscriber growth potential," Guggenheim analyst Michael Morris said in the note. "The company did not see a specific, significant impact on kids or family viewing levels following the domestic launch of Disney+ in November."