Watch this! Netflix stock is going up.

Even Netflix (NASDAQ:NFLX) is the heavyweight champion of streaming in the US, the company still has to prove itself from time to time. Netflix showed its popularity, but the market was not impressed. After looking at all the relevant facts, you will see that Netflix stock should be higher.

Remember that sometimes the crowd is irrational and that is where great opportunities come from. So grab your popcorn and remote, folks. The next episode will see a stunning stock price increase as the market finally appreciates Netflix’s excellent results.

Netflix shares fall despite solid subscriber growth

In the second quarter of 2024, Netflix added a whopping 8 million subscribers, an increase of 16% year-over-year. This brought Netflix to 277.7 million members worldwide.

Let those numbers sink in. They’re even more impressive when you consider that Wall Street expected Netflix to add just 4.5 million new subscribers.

Netflix generated $9.56 billion in revenue in the second quarter of 2024, up 17% year over year. The company also posted earnings of $4.88 per share. Both results topped analysts’ consensus estimates.

Still, Netflix shares fell 6% in post-market trading, though selling pressure quickly abated. Apparently, some stock traders were unhappy because Netflix forecast third-quarter revenue of $9.73 billion.

That misses analysts’ consensus estimate of $9.83 billion, but is still higher than the $9.56 billion in revenue Netflix reported for the second quarter of 2024.

Netflix to phase out its cheapest ad-free subscription

In other news, Netflix is ​​preparing to eliminate its cheapest ad-free plan in the US and France. That doesn’t mean Netflix will be eliminating its $6.99-per-month ad-supported plan, which had “40 million global monthly active users, up from five million a year ago,” according to The Wall Street Journal.

It’s clear that Netflix’s ad-supported plan is quite popular. It makes sense for Netflix to keep this plan available, since it generates ad revenue and may convince some people to upgrade to a more expensive plan.

Does it make sense for Netflix to drop its $9.99-a-month “Basic” plan? Netflix co-CEO Greg Peters believes the answer is absolutely yes.

Apparently, ditching the “Basic” plan overseas has been successful so far, as the company scrapped it in Canada and the U.K. last year. “We’ve had the confidence to go ahead with that change in the U.S. and France, so that’s an indication of how it’s going,” Peters said.

Netflix Stock: Thank the Market for Its Irrationality

Is Netflix smart to drop its cheapest ad-free plan in the US and France? Only time will tell. Maybe it will prompt some people to upgrade their Netflix subscriptions.

That’s unknown, but here’s what I know for sure. Netflix has a huge subscriber base that’s still growing steadily. Furthermore, the company is a revenue growth company that expects to post solid sales in the current quarter.

Investors should therefore thank the market for being irrational and buy Netflix shares before the price skyrockets in the coming weeks.

As of the date of publication, David Moadel had (neither directly nor indirectly) a position in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication guidelines.

The responsible publisher had no (direct or indirect) positions in the securities mentioned in this article on the date of publication.