Around three months ago, right after Netflix (NFLX) announced some disappointing 2nd quarter earnings, I wrote about my concerns over their slowing growth and that I was considering selling some of my shares (which I did end up doing). Since then, the stock has been very volatile and sentiment on the company definitely appears to have changed. Many article were written about Netflix’s amazing growth is finally over now that serious competition is entering the space and the high amounts of spending on original content is about to catch up to them. I mostly didn’t buy those bear cases, and believed that as the world increasingly moves to streaming video, there was still significant growth left for Netflix and room for them to be a major player.

Which isn’t to say I don’t have concerns about Netflix going forward. While there is still plenty of growth left internationally, it does seem like the domestic market is pretty saturated. The entry of cheaper competition and the loss of content like The Office and Friends seems likely to reduce their ability to raise prices in the future. Can the margin on international subs, including places like India where they offer mobile-only plans? Will they ever be able to take their foot off the pedal in terms of creating new content without losing subscribers?

So I was very interested in seeing Netflix’s third quarter earnings, which they announced yesterday. It was the last earnings report before Disney+ and Apple TV+ are launched in November and if they showed another quarter of disappointing subscriber growth, then that would certainly be a big warning sign.

So what did earnings look like? Honestly, they were a bit mixed. Perhaps the most watched number was subscriber additions. Netflix reported 6.8 new subscribers, which barely missed their forecast of 7 million. Still, it was an incredible rebound from the 2.7 million additions they reported in the second quarter. Once again, the majority of the growth came from overseas. Revenue came in right around forecast, although they did beat their earnings per share forecast by a fair amount.

The market seemed torn on how to digest the news. Immediately after the earnings report was released, the stock dropped, before it recovered and started today up around 10%. Since then, it has steadily declined and is now closer to 3-4% up.

I can sympathize with the market a bit. In many ways, it was an impressive report. Netflix continues to grow subscribers at an impressive clip, especially overseas. They continue to be the clear leader in a market that only figures to continue growing by leaps and bounds. At the same time, their growth seems to be decelerating (especially in the US) right before some impressive competitors are entering the space and there’s legitimate questions on how profitable the company can end up being once they’re no longer in growth mode.

My history with Netflix has shown that I always regret underestimating Netflix and Reed Hastings. I trimmed my position a few months ago, but I’m planning on holding onto the rest of my shares for the foreseeable future. I’m well aware of the challenges facing the company, but I also think their growth story isn’t quite over yet. We’ll see if I’m right or not.