Are you wanting to add some blue chip ASX 200 shares to your portfolio? If you are, then you might want to check out the two listed below.

These quality companies have been tipped as ones that could grow at a solid rate over the next decade, potentially generating strong returns for investors. Here’s why they are highly rated:

Sonic Healthcare Limited (ASX: SHL)

The first blue chip ASX 200 share to look at is Sonic Healthcare. It is a leading medical diagnostics company with operations across the world.

Partly due to COVID-19 testing, Sonic has been a very strong performer so far in FY 2021. During the first half, the company reported a 33% increase in revenue to $4.4 billion and a 166% jump in first half net profit to $678 million.

The good news is that COVID testing looks set to continue for some time to come, which bodes well for the company’s growth in the second half and FY 2022. After which, the rest of its business looks well-placed to benefit from a backlog in healthcare work.

In addition to this, due to its strong balance sheet, Sonic has the opportunity to accelerate its growth through acquisitions.

One broker that is particularly positive on the company is Credit Suisse. It currently has an outperform rating and $40.00 price target on the company’s shares.

Woolworths Limited (ASX: WOW)

Another blue chip ASX 200 share to consider is Woolworths. Like Sonic, this retail giant has also been performing strongly in FY 2021.

Thanks to positive performances by its BIG W, BWS, Dan Murphy’s, Woolworths supermarkets businesses, the company reported a 10.5% increase in revenue to $35.8 billion and a 15.9% increase in net profit after tax to $1,135 million.

And while its growth will moderate in the second half when it cycles the panic buying at the height of the pandemic, Woolworths remains well-placed for growth in a post-pandemic world according to Goldman Sachs.

The broker is positive on the company and retained its buy rating and $43.60 price target on its shares this morning.

More reading

• Is the Woolworths (ASX:WOW) share price in the buy zone?
• ASX 200 down 0.4%: Afterpay delivers stellar Q3 growth, Rio Tinto Q1 update
• Woolworths (ASX:WOW) share price lower despite announcing $223m investment
• Wesfarmers (ASX:WES) share price climbs 10% in a month amid ‘favourable momentum’
• Top broker picks ASX shares next in line for a profit upgrade

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With savings accounts and term deposits still offering very low interest rates, the share market arguably remains the best place to earn a passive income.

However, with so many dividend shares to choose from, it can be hard to decide which ones to buy. Luckily, brokers have been doing the hard work for you and have picked out two to buy. They are as follows:

Super Retail Group Ltd (ASX: SUL)

Super Retail is a retail conglomerate that owns the BCF, Macpac, Rebel, Supercheap Auto brands.

It has been growing at a solid rate in recent years and particularly during FY 2021. With international tourism off the cards, Super Retail has been benefiting greatly from a redirection in consumer spending.

This led to the company reporting a 23% increase in sales to $1.78 billion and a massive 139% increase in underlying net profit after tax to $177.1 million during the first half.

Goldman Sachs appears to believe more of the same is coming in the second half. And the good news for shareholders is that it expects this to lead to the company rewarding shareholders with a special dividend with its full year results.

The broker expects a dividend of ~81 cents per share in FY 2021. Based on the current Super Retail share price, this equates to a fully franked 6.5% yield. Goldman Sachs has a buy rating and $15.00 price target on its shares.

Transurban Group (ASX: TCL)

Another dividend share to consider is Transurban. This toll road operator owns a collection of important roads in Australia and North America which offer significant time-savings and have strong pricing power. This includes CityLink in Melbourne and the Cross City Tunnel and Eastern Distributor in Sydney.

While the pandemic led to a sharp drop in traffic volumes, volumes are improving and will continue to do so as vaccines roll out.

One broker that believes it won’t be long until its distributions rebound is Ord Minnett. It recently retained its buy rating and $16.00 price target on its shares.

The broker is forecasting dividends of 37 cents per share in FY 2021 and 58 cents per share in FY 2022. Based on the latest Transurban share price, this equates to yields of 2.6% and 4.1%, respectively, over the next two years.

More reading

• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• Brokers think these shares can outperform the ASX 200
• These high yield ASX dividend shares are rated as buys
• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) dropped by 0.3% today to 6,997 points.

Many ASX blue chips were actually down much in early trading after a rough night in overseas shares. However, there was a steady recovery throughout today.

Here are some of the highlights from the ASX:

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel share price was one of the best performers today in the ASX 200 rising by around 3.5%.

The travel business said that it broke even in March and expects to be generating positive underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in the fourth quarter of FY21. This will be led by the UK, European and ANZ regions of the business.

There has been strong domestic demand in the ANZ region, with total client activity climbing to 85% of FY19 booking levels as of last week. New Zealand continues to be a standout, with trading at more than 160% of FY19 booking levels.

It has won significant clients in the UK and European region despite the lockdowns, which are contributing to profitability because of the essential nature of that travel. The US is also seeing positive signs of an activity recovery.

Management also pointed out that it could be on course for a good recovery because 70% of pro forma revenue was generated from the US and the UK, where vaccination efforts are advanced.

Nuix Ltd (ASX: NXL)

The Nuix share price fell around 15% today after revising its FY21 forecasts.

During April, a significant and larger-than-expected number of Nuix’s customers, including one of its largest, elected to transition from module-based subscription licenses to consumption and software as a service (SaaS) license models, resulting in a shift in both revenue and ACV profiles.

It has reduced its forecast revenue to a range of $180 million to $185 million, down from $193.5 million which was forecast in the IPO prospectus.

Annualised contract value (ACV) is now expected to be in a range of $168 million to $177 million (down from $199.6 million).

Pro forma EBITDA is expected to be $64.6 million to $66.6 million, up from a forecast of $63.6 million.

Management said that an acceleration in customer transition to the new models impacts the revenue profile, but delivers significant longer-term business model benefits.

The current operating environment has reduced near-term upselling opportunities. Revenue from renewals and new business remain in line with expectations.

Despite that, Nuix said that there has been strong underlying business performance with substantial increases in new customers won, and total and average order values, compared to the same period in FY20. One new win has been an Australian state government.

BHP Group Ltd (ASX: BHP)

The BHP share price went down around 0.5% after revealing its report for the period ending March 2021.

For the ASX 200 share’s all-important iron ore division, production for the nine months to March 2021 increased by 4% to 188 million tonnes. Guidance for FY21 remains unchanged at between 245 million tonnes to 255 million tonnes.

Looking at the same year to date to March 2021 period, copper production was down 6%, petroleum production was down 8%, metallurgical coal production was down 2% and energy coal production was down 26%.

BHP chief executive officer Mike Henry said:

We are reliably executing our major projects, bringing on new supply in copper, petroleum and iron ore. The Spence growth option and Samarco are ramping up and West Barracouta, in petroleum, started production this month. First production from petroleum’s Roby project is expected in the coming weeks and South Flank, with its higher grade and lump proportion, is on track to begin production in the middle of the year.

More reading

• What’s with the Advanced Human Imaging (ASX:AHI) share price today?
• ASX stock of the day: Freelancer (ASX:FLN) shares shoot higher
• Why Rio Tinto (ASX:RIO) and BHP (ASX:BHP) look set for another profit upgrade
• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• Why Challenger, Nuix, Splitit, & Temple & Webster are sinking

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is not having a great day, as you might have gathered by now. At the time of writing, the ASX 200 is down 0.29% to 6,997 points. This comes after falling as much as 1.5% earlier in the trading day.

But one company that has faired a little worse than the ASX 200 today is Advanced Human Imaging Ltd (ASX: AHI). Advance Human Imaging shares are currently down 4.42% to $1.73 a share. At this price, Advanced Human Imaging is now down ~13% over the week so far. And more than 20% from the all-time high of $2.19 that we saw the company make back on 3 March.

However, if we zoom out, the picture is a little rosier. Year to date, Advanced Human Imaging is still up more than 36%. Since 3 February, it’s up close to 72%. And, over the past year, the company has enjoyed gains of 930%.

But what about today?

Why is the Advanced Human Imaging share price falling today?

Well, as of Monday, Advanced Human Imaging has just emerged from a ~3-week trading halt. That halt was partly sparked by an ASX speeding ticket from 30 March, and partly for a “subsequent announcement to the market in relation to a material potential acquisition”.

Well, on Monday we learned that that ‘material potential acquisition’ was the Israel-based Physimax Technologies. As my Fool colleague Brooke reported at the time, Advanced Human Imaging has offered to purchase Physimax through a letter of intent for US$6 million worth of its shares. It has also agreed to issue a further US$2 million worth of shares through “an earn-out agreement to be shared with key employees on terms to be agreed”.

On the same day, Advanced Human Imaging also announced that it had signed a licensing and subscription agreement with Triage Technologies, a Canadian company. Advanced Human Imaginghas already paid US$600,000 of the US$3 million that the deal encompasses. It will allow Advanced Human Imaging to use Triage’s AI systems to identify skin conditions. Under the deal, the company will also receive an equity stake in Triage as well.

Some other news

Further, we also got some more news out of Advanced Human Imaging today. The company made an announcement this morning.

This outlined the upcoming launch of the Original Fit Factory Ltd app Truconnect, which is integrated with Advanced Human Imaging technology. This “world–leading app tackling fitness and mental health” is now available on iOS in 71 countries, and will be available on the Andriod Google Play store on 26 April if all goes to plan.

So it’s not entirely clear which of these announcements is spooking investors today (and this week). But the net effect on investors has evidently been one of concern.

At the current share price, Advanced Human Imaging has a market capitalisation of $233 million.

More reading

• ASX stock of the day: Freelancer (ASX:FLN) shares shoot higher
• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• BHP (ASX:BHP) share price drops despite 10-year iron ore highs
• 2 ASX dividend shares to buy with yields above 4%
• The Renergen (ASX:RLT) share price is on watch today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re searching for a growth share or two to add to your portfolio then the three listed below could be worth considering.

Both have been growing strongly and look well-placed for more of the same during the 2020s. Here’s what you need to know about these ASX growth shares:

Appen Ltd (ASX: APX)

The first growth share to look at is Appen. It is a leading developer of high-quality, human annotated datasets for machine learning (ML) and artificial intelligence (AI). Datasets are an integral part of the development, as without high quality data, a model will never fulfil its potential. 

Using its team of over one million crowdsourced experts, Appen can ensure that companies receive the high quality data they need.

It has been growing at a very impressive rate over the last few years thanks to the importance of AI and ML for businesses and governments. And while the pandemic has stifled its growth somewhat, the future remains very bright. Especially with spending on AI and ML expected to increase strongly over next decade.

Citi is positive on the company’s outlook. It has a buy rating and a $30.90 price target on its shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another growth share that is growing quickly is Pushpay. It is a donor management and community engagement platform provider for the faith and not-for-profit sectors.

Pushpay has been benefiting greatly from a number of major trends. One is the shift to a cashless society. With many people no longer carrying money around with them, rattling the donation bucket just doesn’t cut it anymore. In addition to this, the digitisation of the church and the need to engage more efficiently with church-goers has supported adoption.

While there are concerns that the pandemic might have brought forward sales from future periods, potentially leading to slower growth in FY 2022, it could be worth overlooking this and focusing on the long term.

After all, Pushpay is targeting a 50% share of the medium to large US church market in the future. This is a US$1 billion opportunity and many multiples of its current revenue. It also has opportunities to expand into other regions to increase its addressable market.

Goldman Sachs is a fan of Pushpay. It currently has a buy rating and $2.59 price target on its shares.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 3 of the best ASX shares to buy this month
• 2 ASX growth shares that could generate huge returns for investors
• 2 great ASX payment shares to buy
• Broker calls 80% upside on beaten up Appen (ASX:APX) share price

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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One of the best performers on the ASX today is the Alterity Therapeutics Ltd (ASX: ATH) share price. Driving the meteoric rise, the biotech company announced positive results for its lead compound, ATH434.

At the time of writing, Alterity shares are swapping hands for 4.25 cents apiece, up 41.67%.

What does Alterity do?

Alterity is an Australian biotech company that focuses to commercialise research into neurodegenerative disorders. This includes Parkinsonian movement disorders, Alzheimer’s disease, Huntington disease and others.

The company’s lead candidate ATH434 is currently in development. It aims to block the aggregation of pathological proteins that cause brain degeneration. Current remedies include medications and lifestyle choices to manage symptoms, but there is no treatment to cure the disease.

What were the results?

Investors are pushing Alterity shares higher following the release of its oral presentation at the virtual American Academy of Neurology.

According to Alterity’s update, its ATH434 compound has shown promising data for the treatment of Parkinsonian disorders.

The company highlighted the data obtained from the study strengthened evidence in ATH434 protecting brain cells and improving motor function. In a particular task, ATH434 advanced motor performance when assessing coordination and balance in animals. While findings are still new, the company stated that the important data provides future clinical development.

In addition, researchers also found a reduction in glial cell inclusions which is a pathological feature of Multiple System Atrophy (MSA).

Alterity CEO, Dr David Stamler commented:

“These new data are very encouraging and provide a strong rationale for the disease-modifying potential of ATH434.”

About the Alterity share price

Since the sharp increase of 41 cents at the start of July, Alterity share price has moved sideways. In the last 6 months alone, the company’s shares have traded below 5 cents apiece.

Alterity has a market capitalisation of roughly $77 million, with a tad over 2 billion shares on issue.

More reading

• ASX stock of the day: Freelancer (ASX:FLN) shares shoot higher
• 2 fantastic ASX shares that brokers rate as buys
• Why Rio Tinto (ASX:RIO) and BHP (ASX:BHP) look set for another profit upgrade
• Netflix misses sub addition target, shares crash
• Why has the Arafura Resources (ASX:ARU) share price dropped 9%?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P ASX 200 Index (ASX: XJO) is having a pretty nasty day today. At the time of writing, the ASX 200 is down 0.5% to 6,981 points. Well below the 7,000 points it breached last week for the first time since the coronavirus crash last year. But one ASX share is not sharing in the market’s mood today. That would be Freelancer Ltd (ASX: FLN).

The Freelancer share price is currently up 5.03% to 84 cents a share. But its gains were far more dramatic earlier in the trading day. Freelancer shares closed at 80 cents yesterday but opened at 82 cents this morning before shooting as high as 93 cents a share soo after open. At the time, that was a gain of more than 16%. It’s not just today either. This company has been on a tear for most of the week o far. Since Monday, Freelancer shares are up close to 25%.

So who is Freelancer? and why is this current star of the ASX experiencing such love in a cold market today?

Who is this company?

Freelancer, as you can probably guess, is a company that facilitates freelancing work. Its flagship website, freelancer.com.au, is an online marketplace of sorts that helps connect freelance workers with jobs.

It’s not the kind of jobs you might first expect though. There are less ‘mow my lawn’ or ‘pick up my furniture’ jobs on Freelancer. More common jobs include ‘design a logo’, or ‘build my website’. Prospective contractors can bid on jobs, either through a lump-sum payment or an hourly fee.

Freelancer operates around the world. In fact, in FY2020, only 8.4% of completed projects that the company facilitated were in Australia. 24.3% came from the United States, but India, the United Kingdom, Germany and Canada were also strongly represented.

Why is the Freelancer share price rising today?

Today’s stellar performance in the Freelancer share price appears to be the direct result of an ASX announcement the company made yesterday morning before the market open. This announcement was a quarterly report covering the 3 months to 31 March 2021.

For this period, Freelancer reported that its gross payment volume had ballooned by 39% compared to the prior corresponding period to US$192.9 million, an all-time high. Cash receipts were also up significantly, rising 32.1% to another all-time high of US$12 million. The company also reported a positive net operating cash flow of $4.2 million for the quarter, up from $0.47 million in the prior corresponding quarter.

Freelancer also told us that the company enjoyed a 51% increase in web traffic in FY2020, as well as a 22% rise in registered users, a 17% rise in posted jobs and a 20% bump in freelancer earnings.

So it’s likely to be the contents of this quarterly update that are getting investors attention over to the Freelancer share price today. At the current share price, Freelancer has a market capitalisation of $379.5 million.

More reading

• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• BHP (ASX:BHP) share price drops despite 10-year iron ore highs
• 2 ASX dividend shares to buy with yields above 4%
• The Renergen (ASX:RLT) share price is on watch today
• Why the Bega Cheese (ASX:BGA) share price is at a 52-week high

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freelancer Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some fantastic ASX shares that brokers have rated as buys for investors to look at.

When multiple brokers think that a business is a buy then it could be worthwhile taking an interest in that idea.

The below investments have a lot of growth potential and have been rated as buys by more than one broker:

Audinate Group Ltd (ASX: AD8)

Audinate is currently rated as a buy by at least three brokers including UBS. The broker has a share price target on Audinate of $10.10 over the next 12 months.

What does Audinate do? It’s a business that provides audio over IP networking solutions. It’s used in the professional live sound, commercial installation, broadcast, public address and recording industries. The product is called Dante.

Dante replaces traditional analogue audio cables by transmitting synchronised audio signals across large distances, to multiple locations at once, using just an ethernet cable.

It has been one of the businesses negatively affected by COVID-19 due to the effects of virtually no large events. However, the brokers see an opportunity and Audinate is seeing a recovery.

In the first half of FY21 it generated US$11.1 million of revenue, an increase compared to the US$9.3 million in the second half of FY20. It also generated $3.2 million of operating cashflow, which demonstrates the type of margins that Audinate can make in the future.

Audinate reported that its Dante-enabled products were up 27% to 3,008. Management say this is a key leading indicator of future growth.

Management believe the pandemic could serve as a catalyst for an acceleration of the transition from old school analogue cabling to networked audio and video.

Reject Shop Ltd (ASX: TRS)

Reject Shop is one of the largest discount retailers in Australia with a national store network of shops.

It’s currently rated as a buy by at least three brokers including Morgans. The broker has a share price target of $8.91 on the retailer.

Reject Shop is currently working on reducing its cost base by reducing administrative expenses and simplifying and standardising its in-store processes.

COVID-19 has affected its CBD and large shopping centre locations where there is reduced footfall.

However, despite the impacts of lockdowns on the business, it managed to generate a large amount of growth in the first half of its FY21.

Underlying earnings before interest and tax (EBIT) grew by 44.9% to $23.3 million and underlying net profit after tax (NPAT) went up 46.5% to $16.3 million.

Management believe that the discount variety sector presents a significant opportunity for growth over the medium to long term. The ASX share is well positioned to capture this growth.

Once management are happy with the company’s reduced cost base, it will be well placed to pursue longer-term growth through store network expansion and growing its online presence.

According to UBS, the Reject Shop share price is valued at under 20x FY22’s estimated earnings.

More reading

• 3 growing small cap ASX tech shares to watch
• 3 exciting small cap ASX shares for your watchlist
• These top 2 ASX shares should be on your watchlist
• ASX retail shares beware: Aldi e-commerce is coming
• 3 exciting small cap ASX shares to watch

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s hard to think about profit upgrades when the market is tumbling, but that’s what the Rio Tinto Limited (ASX: RIO) share price and BHP Group Ltd (ASX: BHP) share price could be facing.

Analysts are probably going to be left scrambling yet again to upgrade their price forecast for iron ore.

These forecasts are well below the iron ore spot price. For instance, Goldman Sachs pencilled in a price of US$137 a tonne by end of June, reported the Australian Financial Review.

That implies a 27% crash in the ore price in the next 10 weeks!

Market underestimating the iron ore price rally

Goldman isn’t the only one with a seemingly conservative estimate. UBS is forecasting a price of just US$100 a tonne by year end when the spot price is around US$180 a tonne.

Further, UBS expects the steel-making mineral to weaken further in 2022 to US$75 a tonne.

These price predictions are quite typical of analysts’ forecasts as they have always lagged the spot price in the last year or two.

Why RIO and BHP could be cum earnings upgrade again

Experts have underestimated the resilience of the iron ore market, and there are few signs of this market deflating.

In fact, there are probably more tailwinds than headwinds. For one, global steel prices are strong – very strong.

This means that steel mills are making good margins even with the high iron ore price. Recent bullish updates from BlueScope Steel Limited (ASX: BSL) and Sims Ltd (ASX: SGM) attest to this.

If iron ore customers are making a decent return, demand for the commodity will remain strong.

Better this time for RIO and BHP

Meanwhile, the demand dynamics during this commodity boom looks more enduring that the last “supercycle”.

Back in 2011, practically all the demand for iron ore was coming only from China. The Asian giant stepped up its infrastructure spending spree a decade ago to keep its economy growing through the GFC.

This time round, it isn’t only the Chinese pulling on the infrastructure building lever to get over COVID-19.

Firing on more than one cylinder

US President Joe Biden is also looking to unleash US$3 trillion ($3.9 trillion) on rebuilding his nation’s aging infrastructure.

Other countries, including the European Union, are also turning to infrastructure construction to reenergise their economies, although on a less impressive scale.

Foolish takeaway

We also can’t forget that iron ore output from Brazil remains hamstrung as COVID-19 continues to ravage its economy.

The country’s output will recover at some stage, but so far, the experts have underestimated the time this will take.

In the meantime, BHP, Rio Tinto and the Fortescue Metals Group Limited (ASX: FMG) share price will be making hay while the sun shines.

More reading

• Fortescue share price falls as Twiggy calls fossil fuels ‘most dangerous industry in the world’
• BHP (ASX:BHP) share price drops despite 10-year iron ore highs
• ASX lithium shares are soaring. Is it too late to jump onboard?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops, Challenger plummets, Lynas falls

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, BlueScope Steel Limited, Fortescue Metals Group Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Video streaming veteran Netflix (NASDAQ: NFLX) reported first-quarter results just after the closing bell on Tuesday, April 20. The report fell short of a couple of important targets and the guidance for the next quarter was modest. Netflix shares fell as much as 11.8% in after-hours trading, dropping back to levels not seen since March 25.

Netflix added 4 million net new subscribers during the first quarter, adding up to 207.6 million global paid memberships. Management’s guidance had suggested 6 million net additions. Revenue rose 24% year over year to $7.16 billion and earnings jumped from $1.57 to $3.75 per diluted share. The top-line result was roughly in line with guidance and earnings exceeded the stated target of $2.97 per share.

Looking ahead to the second quarter, Netflix’s management expects earnings to double while revenue increases by approximately 19%, landing near $7.3 billion. Subscriber additions are seen slowing down to 1 million names.

“In terms of Q1 performance, it really boils down to COVID, frankly,” said CFO Spence Neumann on the earnings call. “The extraordinary events of COVID continue to have a big impact on the world and for us, at a minimum, it creates some short-term choppiness in some of the business trends that we see.”

In particular, the health crisis generated more than 40 million new subscribers in 2020 while also slowing down the pace of content production dramatically. The soft customer additions in the first quarter followed as a reaction to that combination of factors. Many title launches and new season premieres that had been scheduled for the first half of 2021 have been pushed back to the second half of the year, which will skew the seasonal business rhythm once again. Neumann pointed out that the annual subscriber growth rate works out to about 20% over the last two years, smoothing out the extraordinary growth of early 2020 and the slower pace that followed. That’s in line with the company’s average customer growth in recent years.

Anders Bylund owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Earnings: 2 hot stocks to watch this week
• Netflix is losing market share, but this is the actual risk to shareholders
• Netflix just fixed its only disadvantage in streaming
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Anders Bylund owns shares of Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Netflix misses sub addition target, shares crash appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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