We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why You'll Regret Not Buying Netflix (NFLX) Stock Soon
Read MoreHide Full Article
Streaming behemoth Netflix, Inc. (NFLX - Free Report) had stellar top-line growth in 2020 and 2021, which regrettably dropped to single digits in 2022 and 2023.
However, things are looking up for Netflix this year, as it is positioned to be a foremost streaming service provider compared to its peers, such as The Walt Disney Company (DIS - Free Report) and Warner Bros. Discovery, Inc. (WBD - Free Report) .
Netflix, in reality, has been crowned “the king in streaming” by Bank of America Corporation (BAC - Free Report) as it has become crystal clear that Netflix has won all the recent streaming wars hands down. Netflix’s budding advertising business, by the way, is expected to be a fast-growing venture in 2024.
Netflix is aiming to increase membership in its ad-supported tiers. So far, the initiatives have been fruitful, with the company’s ad tier touching more than 23 million monthly active users at the beginning of this year.
Netflix’s strategic move to crack down on free account sharing is also expected to boost revenue growth this year. Netflix’s paid-sharing policy has been able to substantially improve membership growth in recent times and is likely to remain a tailwind for a few upcoming quarters.
The company has efficaciously built infrastructure to scrutinize households logging into someone else’s Netflix account for free. At the same time, Netflix has got its streaming pricing strategy accurate in times of relentless inflation, while other streaming players have overcharged their customers.
Netflix’s investments in live programs and video games have paid off. It aired a live program called “The Netflix Cup,” and has obtained absolute rights to stream “WWE Raw.” Meanwhile, Netflix’s Grand Theft Auto turned out to be the best-selling video game franchise of all time.
On the earnings front, Netflix has already posted encouraging results in the fourth quarter and expects similar performance all through this year. Netflix’s revenues came in at $8.83 billion, higher than $7.85 billion in the year-ago period. Similarly, the company’s net quarterly income was $937.8 million, up from $55.3 million in the year-ago quarter.
Income improved considerably due to an uptick in subscriptions. Netflix added 13.1 million subscribers in the fourth quarter, easily topping the 8.76 million subscriber growth in the third quarter. The company, at present, has 260.8 million paid membership adds, a new record, to say the least.
What’s more, Netflix assumes its operating margins to improve this year. Thanks to such promising trends, Netflix’s expected earnings growth rate for the current and next year is 40.7% and 21.9%, respectively. Its estimated revenue growth rate for the current and next year is 14.3% and 11.7%, respectively.
The Zacks Consensus Estimate for Netflix’s current-year earnings has moved up 6% over the past 60 days. Additionally, Netflix has kept its operational expenses in check and garnered enough income from sales since the company has a net profit margin of 16%, more than the 10% mark, which is considered to be a healthy margin.
The company is using shareholders’ equity to generate income quite resourcefully since it has a return on equity of 24.8%, and anything above the 20% mark is considered to be good.
Currently, Netflix has a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a combination that offers the best opportunities in the growth investing space. Its shares have already outperformed the broader S&P 500 in the year-to-date period (+19.8% versus +6.4%). You can see the complete list of today’s Zacks Rank #1 stocks here.
Image Source: Zacks Investment Research
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why You'll Regret Not Buying Netflix (NFLX) Stock Soon
Streaming behemoth Netflix, Inc. (NFLX - Free Report) had stellar top-line growth in 2020 and 2021, which regrettably dropped to single digits in 2022 and 2023.
However, things are looking up for Netflix this year, as it is positioned to be a foremost streaming service provider compared to its peers, such as The Walt Disney Company (DIS - Free Report) and Warner Bros. Discovery, Inc. (WBD - Free Report) .
Netflix, in reality, has been crowned “the king in streaming” by Bank of America Corporation (BAC - Free Report) as it has become crystal clear that Netflix has won all the recent streaming wars hands down. Netflix’s budding advertising business, by the way, is expected to be a fast-growing venture in 2024.
Netflix is aiming to increase membership in its ad-supported tiers. So far, the initiatives have been fruitful, with the company’s ad tier touching more than 23 million monthly active users at the beginning of this year.
Netflix’s strategic move to crack down on free account sharing is also expected to boost revenue growth this year. Netflix’s paid-sharing policy has been able to substantially improve membership growth in recent times and is likely to remain a tailwind for a few upcoming quarters.
The company has efficaciously built infrastructure to scrutinize households logging into someone else’s Netflix account for free. At the same time, Netflix has got its streaming pricing strategy accurate in times of relentless inflation, while other streaming players have overcharged their customers.
Netflix’s investments in live programs and video games have paid off. It aired a live program called “The Netflix Cup,” and has obtained absolute rights to stream “WWE Raw.” Meanwhile, Netflix’s Grand Theft Auto turned out to be the best-selling video game franchise of all time.
On the earnings front, Netflix has already posted encouraging results in the fourth quarter and expects similar performance all through this year. Netflix’s revenues came in at $8.83 billion, higher than $7.85 billion in the year-ago period. Similarly, the company’s net quarterly income was $937.8 million, up from $55.3 million in the year-ago quarter.
Income improved considerably due to an uptick in subscriptions. Netflix added 13.1 million subscribers in the fourth quarter, easily topping the 8.76 million subscriber growth in the third quarter. The company, at present, has 260.8 million paid membership adds, a new record, to say the least.
What’s more, Netflix assumes its operating margins to improve this year. Thanks to such promising trends, Netflix’s expected earnings growth rate for the current and next year is 40.7% and 21.9%, respectively. Its estimated revenue growth rate for the current and next year is 14.3% and 11.7%, respectively.
The Zacks Consensus Estimate for Netflix’s current-year earnings has moved up 6% over the past 60 days. Additionally, Netflix has kept its operational expenses in check and garnered enough income from sales since the company has a net profit margin of 16%, more than the 10% mark, which is considered to be a healthy margin.
The company is using shareholders’ equity to generate income quite resourcefully since it has a return on equity of 24.8%, and anything above the 20% mark is considered to be good.
Currently, Netflix has a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a combination that offers the best opportunities in the growth investing space. Its shares have already outperformed the broader S&P 500 in the year-to-date period (+19.8% versus +6.4%). You can see the complete list of today’s Zacks Rank #1 stocks here.
Image Source: Zacks Investment Research