From Yahoo Finance: 2025-03-22 14:45:00

Netflix has been a top performer for investors since its IPO in 2002, with shares rising 80,080%. Its market cap exceeds $400 billion, and it’s a popular long-term investment choice.

In 2024, Netflix generated $39 billion in revenue, up 16% from the previous year, with 302 million subscribers as of Dec. 31, marking significant growth over the years.

Netflix’s success is attributed to its first-mover advantage, rapid subscriber growth, and superior user experience. It currently represents 8.2% of daily TV viewing time in the U.S., with strong engagement expected to continue.

The company’s profitability and scalability have been increasing, with operating margins rising from 13% in 2019 to 27% in 2024. Its fixed-cost business model and occasional price hikes have contributed to earnings growth.

Analysts project Netflix’s diluted earnings per share to increase at a compound annual rate of 22.6% over the next three years. The company has evolved into a dominant media and entertainment player.

Despite its success, Netflix shares are not cheap, trading at a forward P/E ratio of 38.6. While it may continue to rise, it’s not a smart buy at the current premium valuation.

Investors hoping to retire as millionaires should diversify their portfolio and consider a longer time horizon for investments. While Netflix has been a top stock, past returns may not be repeated.

The Motley Fool Stock Advisor team has identified the 10 best stocks to buy now, and Netflix isn’t one of them. Their recommendations have historically outperformed the market significantly.

Investors are encouraged to consider the advice from financial experts and analysts before making investment decisions. Neil Patel and his clients have no position in Netflix, but The Motley Fool has positions in and recommends the company.

Read more: Could Netflix Stock Help You Retire a Millionaire?