Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock’s fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.
A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations.
- The staggering numbers are largely a result of the company’s global expansion, although the 2019 COVID pandemic contributed greatly.
- There are currently 1 sell rating, 12 hold ratings and 22 buy ratings for the stock.
- The business began its European expansion in January 2012, launching in the UK and Ireland.
If it fails at $205 then we may have a range play on our hands between $205 and $165. Momentum indicators still provide room to run before overbought conditions become a problem. Please log in to your account or sign up in order to add this asset to your watchlist. 676 employees have rated Netflix Chief Executive Officer Reed Hastings on Glassdoor.com. Reed Hastings has an approval rating of 90% among the company’s employees. Sign-up to receive the latest news and ratings for Netflix and its competitors with MarketBeat’s FREE daily newsletter.
Netflix Estimates* in USD
With this new strategy, Netflix has stepped back from some of its sacred cows and shown a willingness to meet consumer demand where it is. For example, the company had refused to offer ad-based subscriptions for years and had also been reluctant to crack down on password-sharing. But both of those strategies have been successful, and the company now seems flexible in its resistance to live sports after the WWE deal. With that volatility in mind, you may want to consider investing in index funds or exchange-traded funds (ETFs) rather than individual stocks. These funds invest in hundreds or even thousands of companies at once, giving you a ready-made, diversified portfolio. Even if you plan on holding onto your Netflix stock over the long term, it’s a good idea to review your investment’s performance periodically.
Revenue for the quarter grew 2.72% year over year (YOY) to $8.2 billion. Since announcing the U.S. crackdown on May 23, Netflix has seen its market capitalization skyrocket from roughly $160 billion to $200 billion as of the time of this article. It’s clear that the stock has some air beneath it, and some momentum traders are likely getting involved. Here at Zacks, we prioritize appraising the change in the projection of a company’s future earnings over anything else. That’s because we believe the present value of its future stream of earnings is what determines the fair value for its stock. Netflix is the beneficiary of a trend of people canceling their traditional linear TV subscriptions in favor of streaming instead.
The latter is more convenient and less costly, and it gives consumers more options for where to consume their favorite movies and shows. Instead of forcing you to be in your home to watch, you can view it on your phone while on a train or bus. Whether you should invest in Netflix will depend on a number of factors, such as your portfolio composition, risk tolerance, financial goals, market experience, etc. The investment process does not end as soon as you’ve got the stock in your portfolio.
The stock has more than tripled from its nadir in 2022, including Tuesday’s after-hours gains, as it’s adapted to the challenges in front of it, and found new ways to grow. Netflix began to expand its streaming service internationally https://traderoom.info/ in 2011, and, by the end of that year, it was already available almost everywhere in North, Central and South America. The business began its European expansion in January 2012, launching in the UK and Ireland.
As with purchasing stock, you can sell your shares by entering your broker’s platform and typing in the ticker symbol and the amount you want to sell. You can sell at its current price, or you can place an order to sell only when the stock reaches a certain price. Before investing your money in Netflix or any other stock, you need to do your homework. If you’re going to buy stock, you should know about the company’s fundamentals and ensure it has a business model you think can succeed. Soon after this success, however, Netflix stock price sank dramatically into 2012 as customers canceled their subscriptions in protest of higher monthly fees.
Earnings and Valuation
Indeed, you must continue to monitor your investment and its performance in the market. As of Q4 2023, Netflix has more than 247 million registered users, generating a quarterly revenue of around $8.4 billion, according to Statista. The staggering numbers are largely a result of the company’s global expansion, although the 2019 COVID pandemic contributed greatly. I think when pessimism becomes so widespread, it tends to cause these oversold bounce reactions. The key question for traders and investors is whether this revival has legs. Netflix stock ranks second out of 20 stocks in IBD’s Leisure-Movies & Related industry group, according to IBD Stock Checkup.
In the September quarter, Netflix earned $3.73 a share on sales of $8.54 billion. Analysts had called for earnings of $3.49 a share on sales of $8.54 billion. On a year-over-year basis, Netflix earnings rose 20% while sales climbed 8%. Netflix began offering a streaming video service with licensed movies and TV series in 2007. It later entered the content production business and released its first major original series, «House of Cards,» in February 2013.
With Netflix’s stock price at $71.96, Netflix issued its first two-for-one stock split on February 11, 2004. Randolph, who was also a prolific video producer in his own right, retired from Netflix the same year. WSJ notes that both execs are «well regarded among advertisers and ad buyers,» which could give Netflix a leg up as it works to attract ad business for its shows. The company now also has an «experienced sales leader» in Gorman to help get the new business model off to a running start when it launches early next year. While the password-sharing crackdown is in its early days, the initial results are encouraging. Let’s dig in and assess whether Netflix is worth considering for your portfolio.
Previously, anyone could share their Netflix account with anyone else; however, Netflix realized it was losing money this way and started to stop the process and monetize additional users. The revenue growth rate will be a deceleration from last year, which is understandable. These days, you can typically naga broker link your bank accounts directly to the broker, or you can use a credit or prepaid card. Sometimes, however, you will have to use third-party payment services like PayPal (PYPL). However, it has an Accumulation/Distribution Rating of C-, indicating tepid interest among institutional investors.
You can compare its performance to that of a stock market index like the S&P 500 to see how it measures up. If you decide to buy Netflix stock, open up your trading platform of choice and enter Netflix’s ticker symbol—NFLX—and how many shares you wish to purchase. If you’re using an investment app that offers fractional share investing, you can enter the dollar amount you want to invest in Netflix instead.