Netflix stock has surged 40.5% YTD despite concerns about slowing user growth

From Nasdaq.: 2024-08-29 09:16:00

Netflix’s stock has surged 40.5% year to date, outperforming peers despite concerns about slowing user growth. The company expects lower paid net additions in Q3 2024 due to paid sharing impact. Netflix’s success is attributed to strategic investments in original content, advertising-supported tiers, and international expansion, driving revenue growth.

Netflix is adding Danish series and films to its content slate, along with diverse titles from Indonesia, the Philippines, and Thailand. The company is expanding into gaming and animated series, offering a wide range of entertainment options. The Zacks Consensus Estimate projects 29.8 million paid total streaming net membership additions and 290.4 million total paid subscribers by the end of 2024.

For 2024, Netflix anticipates revenues growing 14-15% and operating margin reaching 26%. The company is exploring new revenue streams like mobile gaming and merchandise licensing. Challenges include competition from Disney+, HBO Max, and others, as well as maintaining market leadership in the saturated streaming landscape and managing valuation multiples.

To sustain its stock momentum, Netflix must continue innovating with content, expanding globally, and diversifying revenue sources. Investors should monitor entry points carefully and consider the company’s long-term strategies. With a Zacks Rank #3 (Hold), Netflix poses opportunities and challenges for investors looking to capitalize on the streaming giant’s growth potential.



Read more at Nasdaq.: Netflix Soars 40.5% YTD: Will Slowing User Growth Pull the Stock Down?