Latest news with #NetflixNFLX
Yahoo
27-05-2025
- Business
- Yahoo
3 Key Reasons to Buy Netflix Stock Beyond its 33% Year-to-Date Surge
Netflix NFLX has already delivered impressive returns to investors in 2025, with shares climbing 33% year to date, significantly outpacing other streaming competitors like Apple AAPL, Amazon AMZN, and Disney DIS, as well as the broader Zacks Consumer Discretionary sector and the S&P 500. Shares of Apple, Disney and Amazon have lost 22%, 1.5% and 8.4%, respectively, in the same time savvy investors shouldn't let this stellar performance deter them from considering the streaming giant as a long-term investment opportunity. Netflix has set its sights on an ambitious target that has caught the attention of investors worldwide: doubling its revenues by 2030 and achieving a $1 trillion market discuss three fundamental reasons why Netflix stock remains an attractive buy, even after its significant appreciation. Image Source: Zacks Investment Research Netflix recently showcased a remarkable ability to exceed expectations across key financial metrics. The streaming leader delivered earnings per share of $6.61, crushing analyst estimates of $5.68 by an impressive 16.37%. This substantial beat wasn't a one-time occurrence but represents a consistent pattern of outperformance, with Netflix surpassing EPS expectations in four consecutive growth remained robust at $10.54 billion, slightly above the $10.50 billion consensus estimate. More importantly, the company maintained its strong operational discipline, guiding for a 29% operating margin for the full year while projecting $8 billion in free cash flow for 2025. This financial strength provides Netflix with substantial flexibility to continue investing in content while returning cash to shareholders through share Zacks Consensus Estimate for NFLX's 2025 revenues is pegged at $44.46 billion, indicating 13.99% year-over-year growth. The consensus mark for earnings is pegged at $25.32 per share, indicating a 27.69% increase from the previous year. Image Source: Zacks Investment Research See the Zacks Earnings Calendar to stay ahead of market-making company's member retention and acquisition trends remain healthy, with Co-CEO Greg Peters noting that retention characteristics for new subscribers joining during major live events like the Paul-Tyson fight and NFL Christmas Day games mirror those of members who join for other premium content. This indicates Netflix's ability to convert event-driven viewers into long-term subscribers, creating sustainable growth momentum. Netflix's advertising business represents perhaps the most compelling growth catalyst for the company's future. Management expects advertising revenues to roughly double in 2025, driven by the successful rollout of their proprietary ad technology platform across key markets. The company has already launched its first-party ad tech suite in Canada and the United States, with the remaining 10 ad-supported markets scheduled for rollout in the coming technological advancement provides Netflix with unprecedented control over the advertising experience, enabling more sophisticated targeting capabilities and improved buyer experiences. The platform now offers targeting based on Netflix's unique data, including life stage, interests, and viewing mood, while also supporting advertisers' own onboarded audiences and third-party vendor segments. Co-CEO Peters emphasized that this enhanced targeting capability, combined with Netflix's vast content library, creates superior campaign outcomes for advertisers while improving the member advertising opportunity extends far beyond current achievements. Netflix represents only about 6% of consumer spend and ad revenues in the markets it serves, indicating massive room for expansion. With the company's relatively small current advertising footprint providing insulation from broader market softness, Netflix is well-positioned to capture increasing market share as its ad platform matures and advertisers recognize the platform's unique value proposition. Netflix's content strategy continues to evolve and strengthen, with recent announcements demonstrating the company's commitment to premium storytelling across diverse genres and markets. The partnership with Dan Brown for a new Robert Langdon thriller series, co-created with acclaimed showrunner Carlton Cuse, exemplifies Netflix's ability to attract top-tier creative talent and proven intellectual properties. Brown's Langdon series has sold 250 million copies globally and been translated into 56 languages, providing a ready-made international company's global content investment strategy remains robust, with Co-CEO Ted Sarandos highlighting recent commitments, including $1 billion in Mexican production, $2.5 billion in Korean content, and continued expansion across 50 countries worldwide. This localized content creation not only serves regional audiences but also travels globally, creating additional value from each live programming strategy continues to gain traction, with successful events like the Taylor-Serrano fight in July and the expansion to all-day NFL football on Christmas Day 2025. These events generate outsized conversation, acquisition, and retention benefits while commanding premium advertising rates. The company's ability to blend live sports and entertainment with its core on-demand offerings creates a differentiated value proposition that competitors struggle to match. Netflix's combination of strong financial performance, revolutionary advertising capabilities, and expanding content moat positions the company for continued success. While Netflix trades at a premium with a forward 12-month P/S ratio of 10.84 compared to the broader Zacks Broadcast Radio and Television industry's forward earnings multiple of 3.7, this valuation appears justified given the company's unique position at the intersection of technology and entertainment. Netflix's ability to outcompete both traditional media companies and tech giants speaks to its exceptional business model and execution. Image Source: Zacks Investment Research Investors seeking exposure to the streaming leader should consider Netflix's proven execution ability and multiple growth vectors that extend well beyond its impressive year-to-date performance. NFLX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
24-04-2025
- Business
- Globe and Mail
Netflix's Trillion-Dollar Dream: Should Investors Buy the Stock Now?
Netflix NFLX has set its sights on an ambitious target that has caught the attention of investors worldwide: doubling its revenues by 2030 and achieving a $1 trillion market capitalization. This bold declaration comes on the heels of the streaming giant's impressive first-quarter 2025 performance, which saw the company beat earnings expectations with $6.61 per share, exceeding the Zacks Consensus Estimate by 16.17% and jumping 54.8% year over year. (Read More: Netflix Q1 Earnings Beat, Revenues Rise Y/Y on Subscriber Gain). The company has consistently outperformed market indices, with a 39.1% six-month return, significantly outpacing other streaming competitors like Apple AAPL, Amazon AMZN, and Disney DIS, as well as the broader Zacks Consumer Discretionary sector and the S&P 500. Shares of Apple, Disney and Amazon have lost 11.6%, 8.1% and 3.8%, respectively, in the same time frame. NFLX Outperforms Sector, Competition The Growth Strategy Behind the Trillion-Dollar Vision Netflix's path to a trillion-dollar valuation isn't just wishful thinking — it's backed by a comprehensive growth strategy focused on four key areas. The company plans to expand its already robust content library, further develop its increasingly successful live programming options, enhance its gaming division, and build out its rapidly growing advertising business. NFLX's content diversity spans genres, languages, and formats, creating multiple growth engines for the company. In the second quarter, new films include Nonnas starring Vince Vaughn, Tyler Perry's new drama Straw starring Taraji P. Henson, Bullet Train Explosion (Japan) and Havoc, an action thriller starring Tom Hardy and Forest Whitaker. New series include Forever, a modern-day take on the classic Judy Blume novel; romantic comedy The Royals (India); The Four Seasons, a comedy starring Tina Fey, Steve Carell and Colman Domingo; El Eternauta (Argentina); and Ransom Canyon, a romantic western. America's Sweethearts: The Dallas Cowboys Cheerleaders, Black Mirror and Ginny & Georgia are all back for brand new seasons. Netflix has also slated the series finales of the Emmy Award-winning adult animated series Big Mouth and fan-favorite YOU. Furthermore, Netflix's live programming strategy has already delivered notable successes, including the Paul-Tyson fight, which became the most-streamed sporting event ever. The company also recently secured the U.S. rights for FIFA's Women's World Cup in 2027 and 2031, demonstrating its commitment to strategic live content acquisition rather than pursuing expensive regular-season sports packages. Ad-Supported Tier: The Hidden Growth Accelerator Perhaps the most promising aspect of Netflix's growth strategy is its advertising business. According to company data, more than 55% of new subscribers in markets where it's available are choosing the ad-supported option. Management projects advertising revenues reaching $9 billion annually by 2030, representing a significant new revenue stream. The company recently launched its Ad Suite in the United States on April 1, with international expansion beginning this quarter. Management expects advertising revenues to double in 2025 alone, signaling confidence in this relatively new business segment. This diversification of revenue streams adds stability to Netflix's growth trajectory and reduces its reliance solely on subscription growth. Financial Health Supports Long-Term Ambition Netflix's financial position remains robust, with first-quarter 2025 revenues reaching $10.54 billion, up 12.5% year over year. The operating margin expanded impressively to 31.7%, up 370 basis points year over year. Free cash flow for the quarter was pinned at $2.66 billion compared with $1.37 billion in the previous quarter. For the second quarter of 2025, Netflix forecasts revenues to increase 15.4% to $11.035 billion and projects an operating margin of 33%, representing a ~6 percentage point year-over-year improvement. The company maintains its full-year 2025 revenue guidance of $43.5-$44.5 billion and free cash flow forecast of approximately $8 billion. The Zacks Consensus Estimate for NFLX's 2025 revenues is pegged at $44.47 billion, indicating 14.01% year-over-year growth. The consensus mark for earnings is pegged at $25.33 per share, indicating a 27.74% increase from the previous year. See the Zacks Earnings Calendar to stay ahead of market-making news. Premium Valuation Justified by Exceptional Performance While Netflix trades at a premium with a forward 12-month P/S ratio of 9.77 compared to the broader Zacks Broadcast Radio and Television industry's forward earnings multiple of 3.91, this valuation appears justified given the company's unique position at the intersection of technology and entertainment. Netflix's ability to outcompete both traditional media companies and tech giants speaks to its exceptional business model and execution. NFLX's P/S F12M Ratio Depicts Premium Valuation Investment Opportunity in 2025 For investors, Netflix presents a compelling opportunity in 2025. NFLX's strong content lineup for 2025, including new seasons of its biggest shows like Squid Game, Wednesday and Stranger Things, positions the company for continued subscriber growth. Combined with its expanding advertising business, innovative gaming initiatives, and strategic live programming acquisitions, Netflix has multiple catalysts to drive growth toward its trillion-dollar ambition. Investors should consider that Netflix continues to hold a leadership position in engagement (approximately two hours per paid membership per day), revenues ($39 billion), and profit ($10 billion in operating income) in a market that continues to expand. With streaming still representing less than 10% of TV hours globally, Netflix has substantial runway for growth. For long-term investors seeking exposure to the continuing evolution of global entertainment consumption, Netflix's strategic vision and execution capabilities make it a compelling buy in 2025, despite its premium valuation. NFLX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Yahoo
15-04-2025
- Business
- Yahoo
Netflix vs. Disney: Which Streaming Giant is a Stronger Stock Pick?
In the fierce battleground of streaming entertainment, Netflix NFLX and Disney DIS stand as towering titans, each wielding unique strengths in their quest for subscriber dominance. Netflix, the original streaming pioneer, boasts massive global subscribers, impressive original content production capabilities, and a proven track record of innovation. Disney+, though a later entrant, leverages Disney's unparalleled content library and powerful franchises spanning from Marvel to Star Wars to both companies jockey for position in an increasingly competitive landscape, investors face a compelling question: Which streaming giant offers the superior investment opportunity? Let's delve deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now. Netflix has firmly established itself as the undisputed streaming market leader, demonstrating remarkable growth momentum in fourth-quarter 2024 with 18.91 million paid net additions — the largest quarterly gain in company history. This surge propelled its total subscriber base to 301.63 million, highlighting Netflix's continued appeal and expansion capabilities even in a maturing company's financial performance underscores this strength, with fourth-quarter revenue increasing 16% year over year and operating income surging 52%. For full-year 2024, Netflix achieved significant milestones, including 16% revenue growth, 27% operating margin (six percentage points higher than 2023), and operating income exceeding $10 billion for the first time in its history. The company's strong cash position, with free cash flow of approximately $7 billion in 2024, provides substantial flexibility for content investments and shareholder content strategy continues to deliver hits across multiple formats. Major successes include Squid Game Season 2, which is on track to become one of its most-watched original series, along with its expansion into live programming with events like the Jake Paul vs. Mike Tyson fight, which became the most-streamed sporting event ever. Looking ahead, the return of flagship series like Wednesday and Stranger Things in 2025 positions Netflix for continued engagement these impressive fundamentals, challenges remain. While the company's advertising revenues are poised to double in 2025 and operating margins continue improving to a targeted 29%, much of this growth appears priced in. Currency headwinds, intensifying premium competition, and uncertain subscriber retention following recent price increases suggest waiting for a more attractive entry point. The return of flagship shows and live sports initiatives creates long-term value, but patience may reward investors seeking better risk-reward 2025, Netflix forecasts revenues of $43.5-$44.5 billion. The Zacks Consensus Estimate for 2025 revenues is pegged at $44.42 billion, indicating 13.89% year-over-year growth. With the Zacks Consensus Estimate for 2025 earnings indicating a downward revision of 0.3% over the past 30 days to $24.51 per share, the market appears to be cautious about Netflix's growth trajectory. Image Source: Zacks Investment Research Find the latest earnings estimates and surprises on Zacks Earnings Calendar. Disney offers investors a compelling diversified entertainment powerhouse featuring multiple complementary business segments. While its streaming service Disney+ reached 178 million subscribers when combined with Hulu, the company's strength extends far beyond digital platforms to include theatrical releases, theme parks, linear television, and theatrical business demonstrated remarkable strength in 2024, becoming the first studio post-pandemic to surpass $5 billion worldwide box office, fueled by hits like Inside Out 2, Deadpool & Wolverine and Moana 2. This box office success creates valuable content that eventually flows to Disney+, demonstrating the company's effective content monetization across multiple windows. Looking ahead, Disney has an impressive slate of theatrical releases, including Captain America: Brave New World, Pixar's Elio and new installments in the Fantastic Four and Avatar company's streaming strategy is evolving impressively, with Disney+ adding an ESPN tile providing bundle subscribers access to ESPN+ sports content. This integration represents a significant differentiator from Netflix, as live sports remain a powerful audience draw. Additionally, Disney+ is enhancing its platform with features like Streams, including a newly announced 24/7 Simpsons channel, that mimic the traditional TV experience many viewers still theme park business continues to demonstrate resilience and growth potential, with plans for significant expansions, including Disneyland's 70th anniversary celebration. This diversified revenue model provides Disney with multiple growth levers and potential upside that pure-play streaming companies lack, while helping fund content creation across its Zacks Consensus Estimate projects fiscal 2025 revenues of $94.63 billion, indicating 3.58% year-over-year growth, with earnings expected to increase 10.26% to $5.48 per share. These projections have remained unchanged over the past 30 days. Image Source: Zacks Investment Research When comparing these e-commerce giants through a valuation lens, Disney emerges with several advantages. Disney's forward P/S ratio of 1.57X is significantly more attractive than Amazon's 8.68X. This indicates that Disney offers better relative value for investors seeking exposure in the streaming space, especially considering its diverse business model and valuable intellectual property. Image Source: Zacks Investment Research From a price performance perspective, Netflix has been the clear winner recently. Its stock has surged 50.8% over the past year, dramatically outperforming Disney and the broader market. Looking longer-term, Netflix's five-year return of 112.1% and 10-year return of 1,040.6% demonstrate its remarkable ability to deliver shareholder value. However, this exceptional performance may limit further upside compared to Disney's potential for multiple expansion. Image Source: Zacks Investment Research While Netflix currently enjoys stronger operating margins at 27% versus Disney's streaming segment still working toward profitability, Disney's comprehensive entertainment ecosystem offers unique advantages for long-term value creation that aren't fully reflected in its current share price. While Netflix demonstrates impressive operational execution with record subscriber growth and profitability, Disney presents the more compelling investment case due to its significantly more attractive valuation, diverse revenue streams, and untapped potential in its streaming business. DIS' unmatched content franchises, strategic sports integration, theme park expansion, and theatrical dominance provide multiple avenues for growth beyond streaming. With a forward P/S ratio just one-fifth of Netflix's, Disney offers substantially better upside potential as it continues to refine its streaming strategy while leveraging its broader entertainment ecosystem. For investors seeking long-term value in the streaming wars, Disney represents the stronger opportunity. DIS and NFLX carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
