Netflix deserves the benefit of the doubt, despite the slowdown in subscriber numbers

CNBC’s Jim Cramer came out in defense of Netflix on Wednesday after shares of the streaming giant sold out in its first quarterly report.

The stock has fallen more than 7% since the report came out after Tuesday’s close, despite the company surpassing estimates at the top and bottom. Investors were disappointed by lower-than-expected subscriber growth and an uncertain short-term future, Cramer noted.

“After the incredible achievements this company has given us over the years, remember that doubting Netflix was a mistake every step of the way,” Cramer said in “Mad Money.”

Netflix reported having 208 million paid subscribers at the end of March, up 14% from a year ago, but less than the 210 million the company expected.

Despite the dip in subscriber growth, CFO Spencer Neumann said during the conference call that “the company remains healthy”, engagement is increasing and customer churn is decreasing.

“To me that says ‘please don’t panic’ … I think they will find a way to trigger new signups with content you shouldn’t miss, whether they make it themselves or need to license it from someone else “In other words, I’ll give Netflix credit for something that doesn’t exist yet, something that will make us feel compelled to subscribe despite all the competition.”

Earlier Wednesday, Cramer said Netflix’s stock could potentially fall to $ 490 a share, although it remains bullish over the long run. Netflix shares ended at $ 508.90 on Wednesday, down 14% from their peak trade in January.