Netflix, Inc. (NASDAQ:NFLX) earnings arrived on Monday afternoon after the market closed on Wall Street. The streaming company showed earnings of $0.86 per share for the three month period. Revenue came in at $1.27 billion for the first quarter of 2014. In anticipation of the release shares in the company trended upward on Monday’s market, finishing the day trading at $348.49.

netflix Inc. (NFLX)

Analysts were looking for 83 cents per share in non-GAAP earnings in the run-up to the release of the Netflix, Inc. (NASDAQ:NFLX) earnings report. The revenue consensus estimate, compiled after a Bloomberg survey of 21 analysts, forecast takings of $1.27 billion for the first quarter. In the same months of 2013 Netflix earned 31 cents per share on revenue of $1 billion.

Netflix earnings show strength and weakness

Netfix Inc (NASDAQ:NFLX) may have managed to beat earnings expectations in today’s earnings report, but investors are able to see more than what the company did right during the quarter. The $30 million miss in revenue may seem small, but it’s not insignificant to a company like Netflix.

The company’s net subscriber additions were also in line with expectations in the quarter, matching an optimistic estimate about the company’s business. Total subscriber numbers stood at 35.7 million at the end of the first quarter of 2014.

Netflix growth spurt faces challenges

Today’s report gives little concrete indication of the future of Netflix, Inc. (NASDAQ:NFLX) business. The company has done exceptionally well and managed great growth, despite massive expectations in recent years, but that doesn’t mean the company can continue its success indefinitely. For many investors the 30% torn off of the company’s valuation in early March was not enough.

In the coming three years Netflix, Inc. (NASDAQ:NFLX) will have to turn what it’s got, a $5 billion dollar a year good idea, into something that justifies a valuation of more than $20 billion. Competition and cost are going to be the two words that dominate conversations about the company’s future. Neither of them has seen much of an exploration thus far.

Netflix, Inc. (NASDAQ:NFLX) stock is one of the most volatile widely followed assets out there. The company has done a great job of impressing investors, but it has done little to reassure them about the company’s future. Some prominent investors, including Carl Icahn, began to sell out of the company last year when the valuation hit monster levels.

Netflix, Inc. (NASDAQ:NFLX) is an interesting company in an exciting business. It is valued for that and more, however, and investors without a relish for risk should stay well away from the company’s stock, even after this evening’s earnings report.