Netflix, Inc. (NFLX), headquartered in Los Gatos, California, operates as a subscription streaming service and production company, offering entertainment services in approximately 190 countries. Valued at $412 billion by market cap, the company offers a wide range of TV series, documentaries, feature films, and games across different genres and languages.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and NFLX definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the entertainment industry. NFLX’s strong brand, extensive content library, and commitment to original productions, including award-winning films and series, set it apart from competitors. The platform has garnered critical acclaim, with its original productions winning an impressive 30 Emmy awards in 2024.
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Despite its notable strength, NFLX slipped 9.5% from its 52-week high of $1064.50, achieved on Feb. 14. Over the past three months, NFLX stock gained 9.8% outperforming the Communication Services Select Sector SPDR ETF Fund’s (XLC) 2.7% gains during the same time frame.
In the longer term, shares of NFLX rose 8.1% on a YTD basis and climbed 60.1% over the past 52 weeks, outperforming XLC’s YTD gains of 3.8% and 26.9% returns over the last year.
To confirm the bullish trend, NFLX is trading above its 50-day moving average since August 2024, experiencing some fluctuations. The stock has been trading above its 200-day moving average over the past year.
NFLX’s outperformance is fueled by its unrivaled scale, strong pricing power, growing margins, consistent subscriber growth, and increasing adoption of ad-supported memberships driving investor confidence. Additionally, its innovations in live sports, advertising, and mobile gaming further reinforce its dominance, reflected by major events like the Logan Paul vs. Mike Tyson fight and NFL games, as well as the recent launch of its ad tech platform across key markets, including the U.S. and Canada.
On Jan. 21,NFLX reported its Q4 results, and its shares closed up more than 9% in the following trading session. Its revenue of $10.2 billion beat analyst estimates of $10.1 billion. The company’s EPS was $4.27, surpassing analyst estimates of $4.20.
NFLX’s rival, Roku, Inc. (ROKU) shares has taken the lead over the stock, with a 9.6% gain on a YTD basis, but has lagged behind the stock with 27.7% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on NFLX’s prospects. The stock has a consensus “Moderate Buy” rating from the 41 analysts covering it, and the mean price target of $1074.92 suggests a potential upside of 11.6% from current price levels.
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