The Magnificent 7 stocks have become ubiquitous with dominant tech companies – does Netflix NFLX fit that description? As the world’s largest online streaming platform, and with continued international subscriber growth, as well as a litany of bullish catalysts, I think it does.
Just a few years ago I remember everyone was talking about the FAANG stocks – Facebook or Meta Platforms META today, Amazon AMZN, Apple AAPL, Netflix NFLX and Google or what is today Alphabet GOOGL.
There was also a time where it included Microsoft MSFT and Nvidia NVDA, but this acronym has since fallen out of favor, although they include most of today’s “Magnificent 7.”
Netflix is now notably missing, but I think it may be worth considering adding the world’s leading content streaming service back to the elite group. Not only would Netflix be one of the best performers of the group over the last year, but it also has a top Zacks Rank and its lowest relative valuation in the company history.
Earnings Estimates Climb
With analysts near unanimously upgrading earnings estimates for Netflix, the company now boasts a Zacks Rank #1 (Strong Buy) rating.
FY24 earnings have been revised higher by 6.2% and are projected to jump 41.5% YoY to $17.03 per share. Additionally, sales over that same period are expected to grow 14.5% YoY to $36.3 billion.
Over the next 3-5 years EPS are forecast to climb at an annual pace of 21.7%, which is a compelling growth rate.
Valuation
Although Netflix stock has rocketed higher over the last year, it now enjoys one of the fairest relative valuation in over a decade. The company is currently trading at a one year forward earnings multiple of 35.8x, which is well below its 10-year median of 92x.
Technical Setup
Another catalyst that Netflix stock enjoys is a convincing bullish technical trade setup. The price action in NFLX has formed a bull flag over the last few weeks, and if it trades above the $615 level, signals a breakout.
Bottom Line
Netflix defied expectations with a stellar Q4, adding 13.12 million subscribers and boosting revenue. Their monetized password sharing, strategic pricing, and overall business strength fueled this growth. With a focus on a diversified content library and international markets, Netflix is well-positioned to maintain its streaming dominance and potentially challenge the tech titans in the future.
For investors looking to add exposure to another leading technology company, Netflix has been flying under the radar.
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The Magnificent 7 stocks have become ubiquitous with dominant tech companies – does Netflix NFLX fit that description? As the world’s largest online streaming platform, and with continued international subscriber growth, as well as a litany of bullish catalysts, I think it does.
Just a few years ago I remember everyone was talking about the FAANG stocks – Facebook or Meta Platforms META today, Amazon AMZN, Apple AAPL, Netflix NFLX and Google or what is today Alphabet GOOGL.
There was also a time where it included Microsoft MSFT and Nvidia NVDA, but this acronym has since fallen out of favor, although they include most of today’s “Magnificent 7.”
Netflix is now notably missing, but I think it may be worth considering adding the world’s leading content streaming service back to the elite group. Not only would Netflix be one of the best performers of the group over the last year, but it also has a top Zacks Rank and its lowest relative valuation in the company history.
Earnings Estimates Climb
With analysts near unanimously upgrading earnings estimates for Netflix, the company now boasts a Zacks Rank #1 (Strong Buy) rating.
FY24 earnings have been revised higher by 6.2% and are projected to jump 41.5% YoY to $17.03 per share. Additionally, sales over that same period are expected to grow 14.5% YoY to $36.3 billion.
Over the next 3-5 years EPS are forecast to climb at an annual pace of 21.7%, which is a compelling growth rate.
Valuation
Although Netflix stock has rocketed higher over the last year, it now enjoys one of the fairest relative valuation in over a decade. The company is currently trading at a one year forward earnings multiple of 35.8x, which is well below its 10-year median of 92x.
Technical Setup
Another catalyst that Netflix stock enjoys is a convincing bullish technical trade setup. The price action in NFLX has formed a bull flag over the last few weeks, and if it trades above the $615 level, signals a breakout.
Bottom Line
Netflix defied expectations with a stellar Q4, adding 13.12 million subscribers and boosting revenue. Their monetized password sharing, strategic pricing, and overall business strength fueled this growth. With a focus on a diversified content library and international markets, Netflix is well-positioned to maintain its streaming dominance and potentially challenge the tech titans in the future.
For investors looking to add exposure to another leading technology company, Netflix has been flying under the radar.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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