CNBC’s Jim Cramer hit Netflix’s defense Wednesday after the streaming giant’s shares were sold in its first-quarter report.
Shares have fallen more than 7% since the report was released after Tuesday’s close, although the company exceeded estimates for the top and bottom lines. Cramer noted that investors were disappointed with slower-than-expected subscriber growth and an uncertain short-term future.
“After the incredible performance this company has given us over the years, you have to remember that doubting Netflix has been a mistake every step of the way,” Cramer told Mad Money.
Netflix reported that it had 208 million paid subscribers at the end of March, 14% more than a year ago, but below the 210 million the company expected.
Despite falling subscriber growth, chief financial officer Spencer Neumann said in the conference call that “the business remains healthy,” commitment increases and customer turnover decreases.
“For me, he says ‘please don’t be scared’ … I think they’ll find a way to start new registrations with essential content, whether they create it themselves or have to license it to someone else “Cramer said. “In other words, I’m giving credit to Netflix for something that doesn’t exist yet, which will make us feel compelled to subscribe to it despite all the competition.”
Earlier Wednesday, Cramer said Netflix shares could drop to $ 490 per share, although it remains bullish in the long run. Shares of Netflix ended Wednesday at $ 508.90, 14% lower than its January high.