Latest news with #NFLX
Yahoo
13 hours ago
- Business
- Yahoo
Here's What Supports Netflix's (NFLX) Long-Term Growth
Sands Capital, an investment management company, released its 'Sands Capital Technology Innovators Fund' Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund's top 5 holdings to know more about its best picks for 2025. In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Netflix, Inc. (NASDAQ:NFLX). Incorporated in 1997, Netflix, Inc. (NASDAQ:NFLX) is an entertainment services provider. The one-month return of Netflix, Inc. (NASDAQ:NFLX) was -9.94%, and its shares gained 85.59% of their value over the last 52 weeks. On July 23, 2025, Netflix, Inc. (NASDAQ:NFLX) stock closed at $1,176.78 per share, with a market capitalization of $500.044 billion. Sands Capital Technology Innovators Fund stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its second quarter 2025 investor letter: "Netflix, Inc. (NASDAQ:NFLX) is the world's largest producer and distributor of video streaming content, measured by content spending and subscriber base. Shares rose following strong first quarter 2025 results, which reflected solid subscriber growth and retention, continued margin expansion, and increased capital returns, including a $3.5 billion share repurchase—the largest in the company's history. Advertising momentum continued, bolstered by reports of a $9 billion internal ad revenue target by 2030. In our view, these results underscore the compelling value of Netflix's robust content portfolio, competitive pricing, and growing ad-supported tier. Video entertainment has historically remained resilient during economic downturns, and we expect Netflix's scale and market leadership to support ongoing durability and long-term growth." A home theater with family members enjoying streaming content together. Netflix, Inc. (NASDAQ:NFLX) is in 14th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 150 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the first quarter, compared to 144 in the fourth quarter. While we acknowledge the potential of Netflix, Inc. (NASDAQ:NFLX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Netflix, Inc. (NASDAQ:NFLX) and shared the list of stocks Jim Cramer shared thoughts on. Netflix, Inc. (NASDAQ:NFLX) contributed to the relative performance of Aristotle Atlantic Focus Growth Strategy in the second quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 hours ago
- Business
- Yahoo
Netflix, Inc. (NFLX): 'I Felt Bad' About The Earnings Call, Says Jim Cramer
We recently published . Netflix, Inc. (NASDAQ:NFLX) is one of the stocks Jim Cramer recently discussed. Netflix, Inc. (NASDAQ:NFLX) is one of the most frequently discussed stocks on Cramer's show. While Cramer is one of the firm's biggest fans, the stock fell by 4% after its latest earnings, as executives attributed the annual revenue guidance raise to a weaker dollar instead of user growth. Cramer discussed Netflix, Inc. (NASDAQ:NFLX)'s upgrades after the earnings as well as the results themselves: 'Now you could have estimates go up and up that you end up with. . .Netflix. And those. . .where you just say you know what, they moved up, moved up, moved up. But we have a lot of catch-up upgrades today. Catch-up price target bumps. Cramer was quite excited about Netflix, Inc. (NASDAQ:NFLX) ahead of its earnings. Here's what he said: 'After the close, we're treated to the most delightful of conference calls, Netflix. First thing, I have a dearth of things to watch right now. It's really starting to bug me. So I'm going to be listening to the conference call in part because they talk about all the great overseas programming. I get some terrific ideas of what to watch when I get home that night. The bar is very high for Netflix, though, which will have to tell us how their ad tier is going, how Squid Game did, and how NFL Christmas streaming football advertising's looking.' While we acknowledge the potential of NFLX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
Business Insider
20 hours ago
- Business
- Business Insider
Advertising Pivot Renews Upside Hopes for Netflix Stock (NFLX)
Netflix (NFLX) has executed one of the boldest pivots in recent corporate memory, shifting from a subscription-only model to becoming a major force in advertising. Last week, the company stunned Wall Street by raising its revenue guidance by $1 billion to a range of $44.8–$45.2 billion while boasting 302 million global subscribers—that's almost half of Europe's entire population. NFLX's performance has fueled a stock climb, especially since April, leaving the S&P 500 (SPY) in the rear-view mirror. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. But here's the twist flying under the radar: Netflix now trades at a sky-high 52.8x forward earnings, nearly quadruple the average of its sector peers—a valuation that assumes near-perfect execution. For now, I'm maintaining a Hold rating. Netflix's operational performance is undeniably impressive, but at these elevated valuation levels, even small missteps could lead to sharp corrections. Netflix's Internet Breaking Password Crackdown Investors and streamers alike will remember when Netflix declared war on password sharing. As it turns out, that controversial crusade became financial alchemy. Management didn't just convert apparent freeloaders into paying customers; it orchestrated one of the most successful customer acquisition campaigns in streaming history while barely breaking a sweat, as shown by TipRanks data. The next masterstroke was Netflix's strategic rollout of its ad-supported tier—a move that essentially said, 'Can't afford the premium plan? No problem, we'll serve you ads instead.' This wasn't a desperate attempt to boost revenue; with a solid balance sheet behind it, the shift was a deliberate expansion into a previously untapped audience segment. Yet beneath this move potentially lurks a troubling reality: Netflix's share of U.S. streaming time has flatlined, while viewing hours inched up a measly 1%. Netflix subscriptions are competing with Disney+, HBO Max, Apple TV+, and multiple other apps for your attention span in a challenging economy. Netflix may be winning plenty of battles, but the war for viewership has become a brutal, expensive stalemate, as Q3 EPS suggests. The content lineup reinforces the same message. With Squid Game 3, Wednesday, and the final chapter of Stranger Things on the horizon, Netflix is leaning heavily into its established blockbusters rather than chasing unproven concepts. When streaming giants start playing it safe, it's usually a sign that the era of effortless growth is coming to an end. AI-Powered Efficiency Meets Old-School Hollywood Drama That said, Netflix's real secret weapon isn't just its content—it's the data-driven innovation powering everything behind the scenes. The company has rolled out AI tools that have accelerated visual effects production by a factor of 10 for shows like El Eternaut, shrinking timelines that once took months down to just weeks. Netflix's algorithmic prowess goes far beyond just trimming costs. Its recommendation engine has become so advanced, it often feels like it knows your tastes better than you do—surfacing shows you didn't even realize you wanted to watch. This creates stickiness that transcends basic subscription logic; when the platform feels that personalized, canceling becomes a much harder decision. Still, even cutting-edge tech has its limits in today's hyper-competitive landscape. Disney (DIS) commands a multigenerational content library, Apple (AAPL) has the financial firepower to reshape industry dynamics, Amazon practically gives Prime Video away through ecosystem bundling, and legacy media giants appear to have finally shaken off their digital inertia. Netflix's geographic expansion strategy is also evolving. Instead of spending heavily to enter new markets directly, the company is partnering with local players, such as CANAL+, to tap into under-monetized regions across Africa and Latin America. It's a more efficient approach, but whether these markets can move the needle on earnings remains the billion-dollar question—especially given the relatively low revenue per user compared to U.S. subscribers. Netflix's Precarious Valuation At 52.8x forward earnings, Netflix stock is priced as if the company will flawlessly execute on all fronts—content creation, advertising, global expansion, and intense competition—all at once. For context, Disney trades at 25x, while traditional media peers average around 15–20x. In essence, Netflix carries the valuation of a high-growth startup but faces the operational demands of a global media conglomerate. A conservative DCF analysis using a 2.5% terminal growth rate and an 8.2% cost of capital estimates Netflix's fair value at around $1,040 per share. With the stock currently trading at $1,233, that implies roughly 20% overvaluation—even factoring in potential advertising upside that may never fully materialize. Valuation concerns deepen when examining revenue multiples: Netflix trades at a 12.5x forward revenue multiple, significantly above the sector median of around 2x, effectively pricing in years of flawless execution in an increasingly unforgiving environment. The advertising pivot is arguably Netflix's most high-stakes gamble yet. Turning a vast subscriber base into meaningful ad revenue is a delicate balancing act—too many ads risk alienating users, while too few won't generate sufficient financial returns. So far, early signs are promising, but the real challenge will emerge as ad loads increase and subscriber tolerance is put to the test. No one really knows where the breaking point lies—largely because Netflix has never pushed its audience this hard before. Market Saturation Meets Expansion Reality Netflix faces a brutal mathematical truth: developed markets are essentially tapped out. North America and Europe have reached natural penetration ceilings, forcing an increased reliance on emerging markets, which have anemic revenue per user and inflated acquisition costs. The password enforcement windfall represents a one-time harvest, meaning future growth must emerge from genuine market expansion or competitive victories, both of which are significantly harder than converting existing viewers. This fundamentally pivots Netflix from subscriber growth champion to operational leverage specialist. The company must now excel at advertising sales, inventory management, audience segmentation, and monetization optimization, entirely different competencies than those that built the original empire. Macroeconomic turbulence could paradoxically benefit Netflix if consumers migrate to ad-supported tiers, accelerating diversification strategy. However, looming tariffs, economic volatility, and regulatory changes add risk that could disrupt even the most masterfully crafted plans. Netflix's global footprint, advantageous for content amortization, also creates exposure to geopolitical tensions and currency fluctuations that domestic competitors avoid entirely. What is the 12-Month Forecast for NFLX Stock? Wall Street maintains a Moderate Buy consensus based on 26 Buy ratings, 11 Hold, and one Sell rating over the past three months. Netflix's average stock price target of $1,391.88 implies ~17% upside over the next twelve months. For a stock trading at nosebleed valuations, these tepid expectations feel vulnerable. Recent earnings revisions trend bullish with 17 upward EPS adjustments, but target dispersion ranging from $950 to $1,500 reveals genuine uncertainty. Netflix at a Crossroads: Brilliant Execution Meets Valuation Gravity Netflix is undeniably evolving in ways that unlock real value. Its push into advertising, operational efficiencies, and strategic global expansion has created meaningful competitive advantages that, under the right conditions, justify a premium valuation. The management team has earned considerable respect, and Netflix's technological edge remains a defensive moat that few rivals can match. That said, I believe the current share price already reflects these strengths—leaving little margin for error. The company's next chapter will reveal whether its operational excellence can continue to defy valuation gravity, or if even the most impressive execution eventually meets the limits of financial reality.
Yahoo
a day ago
- Business
- Yahoo
Wall Street Eyes $1,600 for Netflix Stock. What Could Push NFLX Higher?
Shares of the streaming and entertainment giant Netflix (NFLX) are on a remarkable run, rising 83% over the past year. Despite economic uncertainties affecting consumer behavior, Netflix has managed to expand its subscriber base steadily. This growth reflects the strong demand for its content and effective monetization strategies, which are contributing to lower customer churn. These factors collectively support Netflix's robust stock performance. Yet even with such a steep climb, Wall Street still sees room for growth. The highest price target for NFLX stock on Wall Street is $1,600, implying approximately 36% upside potential from its current price. More News from Barchart Nvidia Stock Warning: This NVDA Challenger Just Scored a Major Customer Dear Microsoft Stock Fans, Mark Your Calendars for July 30 Dear QuantumScape Stock Fans, Mark Your Calendars for July 23 Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! However, Netflix stock is getting too expensive, raising concerns. With a forward price-earnings ratio of 47.3x, Netflix's valuation is certainly rich. For perspective, analysts forecast earnings growth of about 31.4% in 2025, followed by 23.4% in 2026. While those numbers are strong, they may not fully justify the current premium unless Netflix continues to exceed expectations by a significant margin. So, what could be the catalyst that will help NFLX to command a premium valuation? Let's take a closer look. Content and Monetization Are Key Drivers for NFLX Netflix consistently delivers solid revenue growth, expands its operating margin, and generates strong free cash flow. Its latest earnings report showed continued momentum in the business. The streaming giant's revenue climbed 16% year-over-year in Q2, powered by its growing subscriber base, strategic price increases, and expanding advertising revenue. Moreover, this growth was consistent across all geographic regions, with each posting double-digit revenue increases. Netflix's profitability is also on the rise. Its operating income surged 45% year-over-year to nearly $3.8 billion, while the operating margin climbed to 34% from 27% a year ago. Earnings per share (EPS) followed suit, reaching $7.19 in Q2, a 47% increase compared to last year's $4.88. Netflix's solid financial performance reflects its ability to engage its audience with compelling content and effectively monetize that engagement through both subscriptions and advertising. Looking ahead, Netflix's content pipeline remains robust and likely to sustain high engagement. The remainder of the year promises a strong lineup, including returning favorites like the second seasons of Wednesday and Emmy-nominated Nobody Wants This, the third season of Japan's Alice in Borderland, and the much-anticipated final chapter of Stranger Things. New film releases are also expected to attract large audiences. The company is also expanding its presence in live programming, a space that continues to gain traction. Upcoming highlights include two major boxing events in the third quarter, as well as Netflix's NFL Christmas Day doubleheader, featuring high-stakes divisional matchups. These events mark a strategic effort to position Netflix as a destination for live experiences. Beyond content, Netflix is refining its pricing strategies to improve monetization. The company reported that member acquisition, churn, and subscription mix have responded positively to recent price adjustments, largely in line with expectations. These pricing gains are crucial, as they enable Netflix to reinvest in content and technology, further enhancing the platform. A significant part of Netflix's growth and monetization strategy involves expanding its advertising business. Netflix remains on track to roughly double its ad revenue in 2025. To support this goal, it recently completed the rollout of the Netflix Ads Suite, its proprietary ad tech platform, across all its advertising markets. Early feedback suggests that the rollout is progressing as planned. The platform is designed to deliver better targeting, more accurate measurement, innovative ad formats, and broader programmatic capabilities, thereby improving the experience for advertisers and driving revenue growth. In summary, Netflix's robust financial performance, strong content pipeline, and strategic monetization efforts position it well to deliver solid revenue and earnings growth, which may justify its premium valuation. Is Netflix Stock a Buy Now? Netflix has been putting on quite a show for investors lately. The streaming giant is delivering impressive results across the board, led by strong subscriber growth, widening profit margins, and growing ad revenue. Further, the Street's highest price target of $1,600 suggests considerable upside potential. However, the stock isn't cheap. With shares already riding high, its valuation is on the steeper side, which is why analysts' consensus rating is 'Moderate Buy' for Netflix. In short, Netflix is hitting all the right notes from a growth perspective. However, potential investors may want to wait for a dip before jumping in. If the stock pulls back further, it could offer a more compelling entry point for long-term growth. On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Netflix Second Quarter 2025 Earnings: EPS Beats Expectations
Netflix (NASDAQ:NFLX) Second Quarter 2025 Results Key Financial Results Revenue: US$11.1b (up 16% from 2Q 2024). Net income: US$3.13b (up 46% from 2Q 2024). Profit margin: 28% (up from 23% in 2Q 2024). The increase in margin was driven by higher revenue. EPS: US$7.35 (up from US$4.99 in 2Q 2024). AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. All figures shown in the chart above are for the trailing 12 month (TTM) period Netflix EPS Beats Expectations Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 1.7%. Looking ahead, revenue is forecast to grow 11% p.a. on average during the next 3 years, compared to a 10% growth forecast for the Entertainment industry in the US. Performance of the American Entertainment industry. The company's shares are down 5.6% from a week ago. Balance Sheet Analysis While earnings are important, another area to consider is the balance sheet. We have a graphic representation of Netflix's balance sheet and an in-depth analysis of the company's financial position. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
