Netflix Shares See Boost Following Subscription Reports

Netflix opened April at $280.29, but managed to hit a record high of $336.06 by the 17th of the same month. What’s going on with this foundational tech stock? And should buyers wait for it to fall or start buying in now?

Though Netflix was initially hit hard by the damage that also took down Facebook and Google, it was able to quickly rebound on the wake of its Q1 reports. With a high subscriber count and earnings report, Netflix was able to pull itself up quite quickly.

Recent reports show Netflix at a subscriber account of 125 million throughout the globe. Netflix is currently estimated at a market cap of $145.8 billion. This positions Netflix on nearly equal footing with Comcast and Walt Disney. In the past few years, Netflix has grown tremendously and it continues to rise. Strong consumer reports were able to renew investor faith following a tumultuous period.

Netflix, like many other tech stocks, found itself being influenced by the privacy issues plaguing Facebook. Though Netflix, Amazon, and Google weren’t directly related to Facebook’s privacy issues, growing regulatory concerns had impacted the entirety of the tech industry. This downturn, for Netflix, may have been an excellent opportunity for some late investors to pick up Netflix stock. But whether or not Netflix was a good buy then doesn’t necessarily mean Netflix is a good buy now.

Though Netflix has been rising consistently, some analysts warn that it may currently be over-valued. A market cap rivaling Walt Disney Co. is significant, especially in a business that entered the realm of public consciousness less than decade ago. Though Netflix has shown itself to be willing to pivot with ease (moving from its predominantly video rental service to a predominantly streaming service), it’s still relatively new.

In the last two years, Netflix has been investing more into its Originals line up, with a plan to invest $8 billion in original content and to have half of its library content be original content as of 2019. This is a bold and significant move for the streaming service, and it will remain to be seen whether its current user base embraces the Netflix Original content or instead seeks streaming providers that have more variety.

Stocks can be over-inflated directly after positive earnings reports and the stock may yet fall a little again as investor enthusiasm wanes. That being said, there may still be waves to come regarding increased privacy regulations, and the worst may not be over when dealing with Facebook’s privacy concerns and the overall concerns that consumers currently have with the data that is being collected on them and the advertising that is being directed towards them.

When the smoke clears, it’s possible that investors will be able to buy into Netflix at lower prices. Of course, it’s equally possible that the streaming giant could continue to grow, as it has done in the past few years; this all relies upon Netflix’s ability to continue to pivot into its original content space without losing subscribers. Netflix is not without competition, and Disney at the wings to start its own streaming service. Disney may very well have an edge on other media, as Disney currently owns a significant number of intellectual properties.

Disney currently has a streaming deal with Netflix that is set to expire in 2019. It’s expected that Disney is going to launch a competitive streaming service that very same year. By 2019, Disney is also expected to own a considerable amount of 21st Century Fox. All of this could mean some substantial changes in Netflix, its business model, and its subscription base. However, reports indicate Disney may be going after a more family-friendly market, in addition to undercutting Netflix’s current pricing structure.

As a whole, analysts have favorable things to say about Netflix stock. Not only is Netflix capturing subscribers faster, but the company itself appears strong, and profitability is being achieved while still providing value to the consumer. At the same time, with the stock now at an all-time high, it may not be a very attractive buy for investors getting in late.

Regards,

Ethan Warrick
Editor
Wealth Authority


Most Popular

These content links are provided by Content.ad. Both Content.ad and the web site upon which the links are displayed may receive compensation when readers click on these links. Some of the content you are redirected to may be sponsored content. View our privacy policy here.

To learn how you can use Content.ad to drive visitors to your content or add this service to your site, please contact us at [email protected].

Family-Friendly Content

Website owners select the type of content that appears in our units. However, if you would like to ensure that Content.ad always displays family-friendly content on this device, regardless of what site you are on, check the option below. Learn More



Most Popular
Sponsored Content

These content links are provided by Content.ad. Both Content.ad and the web site upon which the links are displayed may receive compensation when readers click on these links. Some of the content you are redirected to may be sponsored content. View our privacy policy here.

To learn how you can use Content.ad to drive visitors to your content or add this service to your site, please contact us at [email protected].

Family-Friendly Content

Website owners select the type of content that appears in our units. However, if you would like to ensure that Content.ad always displays family-friendly content on this device, regardless of what site you are on, check the option below. Learn More

Leave a Reply

Your email address will not be published. Required fields are marked *