In 2022, it came to the limelight that Netflix, Inc. NFLX was losing bucketloads of customers. It was getting seriously affected by competition around the period, and consequent to a crackdown it imposed on consumers who were sharing their passwords with friends and family, its stock price started plummeting.
However, despite this initial price correction, the crackdown turned out to be the start of a definitive turnaround. Since its commencement in May 2023, Netflix has added millions of subscribers despite the intense streaming wars. In 2024, the entertainment major has flown past its peer groups, and its share price has grown in leaps and bounds. In fact, year to date, Netflix has rallied 44.7% compared with 20.2% growth of the S&P 500.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
Share price of this Zacks Rank #3 (Hold) company, which is part of the Zacks Broadcast Radio and Television industry, has grown a whopping 113.6%, since the beginning of the password crackdown. In this period, the PeerGroups have declined 4.7%. These peers include Warner Bros. Discovery, Inc. WBD and Fox Corporation FOX, both of which also carry a Zacks Rank #3. To give an idea of how well Netflix has done, Warner Bros. has receded 38.7% and Fox has jumped 22.9% in the same period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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NFLX’s stock has also been benefiting from its move to offer a cheaper ad-supported viewing experience. It is now the leader in digital streaming, offering subscription video-on-demand service in more than 190 countries, and is gaining from its reputation of being an original content-maker.
Netflix is now looking to expand into new areas, such as live events and gaming to cement its dominance in the streaming age. In May, the company announced that it would be the home for both Christmas Day NFL games this year and have exclusive rights to at least one of the NFL Christmas games in 2025 and 2026, besides its $5 billion deal to stream WWE’s flagship wrestling show, Raw.
In July, the company reported second-quarter 2024 earnings of $4.88 per share, which beat the Zacks Consensus Estimate by 3.83%. The figure jumped 48.3% from the year-ago quarter. Revenues of $9.55 billion increased 16.8% year over year and beat the consensus mark by 0.29%, driven by a 16% increase in average paid memberships. Also, this is the fourth straight quarter wherein the company has witnessed accelerated revenue growth. Netflix’s expected earnings growth rate for the current year is 58.6%.
It will thus be prudent to watch this stock, which is likely to be boosted further with the interest rates coming down and discretionary expenditure rising.
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Today, See These 5 Potential Home Runs >>Netflix, Inc. (NFLX) : Free Stock Analysis Report
Warner Bros. Discovery, Inc. (WBD) : Free Stock Analysis Report
Fox Corporation (FOX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
