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Streaming giant Netflix (NFLX) recently expanded its crackdown on password sharing around the world. This may increase your revenue, but it leaves you with the risk of your service being canceled. Now let’s discuss whether to buy, sell or hold stocks.
Netflix, Inc.NFLX) is an established leader in the streaming world. Despite years of stronghold in the industry, Amazon.com, Inc. (AMZN) and The Walt Disney Company (DIS) has divided the streaming market into highly competitive areas. Intense competition and an increasingly fragmented market share pose significant challenges for the company.
NFLX is riding rough waters as it begins to lose subscribers in 2022 and pushes its stock to multi-year lows. But it has rebounded.
NFLX recently announced that: The company’s ad-supported service has 5 million subscribers, which led to a sharp rise in stock prices. According to the company, more than a quarter of new registrants choose the ad-supported plan in countries where it’s available.
In addition, the company Expanded crackdown on password sharing Open to 103 countries and territories, warning users that accounts cannot be shared outside the household for free, and shared passwords will incur additional charges. In the US the price is $8/month. The ad-supported tier and crackdown on password sharing should encourage cash generation.
However, NFLX’s recent freerider move poses a risk of cancellation. According to his Aluma Insights survey last year, 13% of adult Netflix users say they are more likely to cancel service If Netflix charges $3/month for additional on-the-go users.
Therefore, it may be best to wait for further operational updates to understand the true potential of the strategy before investing in the stock. This article details some of its key metrics.
Tracking NFLX’s net profit, revenue, gross margin and liquidity ratio
NFLX has shown a positive trend in net income for the past three years. Net income stood at $26.82 billion at the end of June 2020, representing a 16.6% growth from June 2017 when net income was reported at $23.04 billion. Since then, net income has steadily increased until the end of September 2021, reaching a peak of $50.5 billion. Net income then fell 8.3% to end the year at $51.2 billion. According to the latest data as of the end of March 2023, net profit fell 3.4% year-on-year to $41 billion.
NFLX revenue increased from $22.63 billion to $31.91 billion from June 2020 to March 2023, a growth rate of 38.9%. In the most recent quarter, it rose 2.7% from June 2021 to March 2023.
NFLX’s gross margin has fluctuated from 39.0% on June 30, 2020 to a peak of 41.1% on March 31, 2021. After that, the gross margin declined to 38.3% by March 31, 2023. Since the start of the series, the gross margin has decreased by 14.3%.
Company’s current ratio Gradually increased from June 2020 (1.12) to March 2023 (1.26). However, there have been fluctuations, with a large decrease (0.95) in December 2021, followed by a moderate decrease from June 2021 to September 2021 and September 2022 to December 2022. As a general trend, the liquidity ratio is increasing. The growth rate from June 2020 (1.12) to March 2023 (1.26) will be about 11.4%.
NFLX stock gains: 24% in 5 months
From December 2022 to May 2023, NFLX’s stock price is on an overall upward trend. The stock started at $318.16 on December 2, 2022 and grew to a high of $394.16 by May 30, 2023, a growth rate of 24%. Here is the NFLX price chart for the last 180 days.
Analyzing NFLX’s POWR Rating
NFLX has an overall rating of C, which equates to Neutral in our rating. power rating system. Ranked 31st out of 58 stocks. the internet category.
According to NFLX’s POWR ratings, the highest ratings are in the quality and sentiment dimensions, with ratings of 83 and 58 respectively as of December 31, 2022. The Momentum dimension remained consistent, rated at 7 from 31 December 2022 to 30 May 2023. However, ratings for the growth, stability and value dimensions declined over the same period.
How does Netflix Inc. (NFLX) stand out from its competitors?
Other internet sector stocks worth considering include Trivago NV (TRVG), Travelzoo (Tso), and Opera Limited (oprah) — They have a better POWR rating.
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NFLX shares were trading at $393.44 a share Wednesday afternoon, up $0.46 (+0.12%). Year-to-date, NFLX is up 33.42% of his. In comparison, the benchmark S&P 500 index over the same period rose 9.76% for him.
About the Author: Subhasri Kar
Subhasree’s keen interest in financial instruments prompted him to pursue a career as an investment analyst. After completing his master’s degree in economics, he acquired knowledge in equity research and portfolio management at Finlatics.
post Buy, Sell, Hold June: Netflix (NFLX) first appeared in stocknews.com