From Morningstar: 2024-04-16 07:37:00

Netflix is set to release its first-quarter earnings report, with a fair value estimate of $425 and a 2-star Morningstar rating. Key points to watch for include subscriber net additions, the status of the advertising-supported subscription tier, the post-strike landscape, and sports contracts. The company has a narrow economic moat, solid financial strength, and faces high uncertainty due to evolving competition in the streaming industry.

Netflix stock is overvalued compared to its fair value estimate, but the company is in good financial shape with a positive outlook for free cash flow growth. The company’s success is attributed to being a first mover in the streaming industry, but competition and price sensitivity among consumers pose risks and uncertainties for future growth. Bulls see potential in hit shows, advertising-supported subscriptions, and international market expansion, while bears are concerned about increasing competition, pricing pressures, and the need for consistent hit content.



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