![]() ![]() Note as well that Netflix's guidance for Q4 calls for further continued acceleration in revenue growth to 11% y/y - which is a rarity in this economy where most companies, particularly in the tech sector, have commented on slowing revenue growth driven by macro factors. Revenue grew 8% y/y to $8.54 billion, accelerating sharply over Q3's 2% y/y growth rate. Netflix Q3 earnings highlights (Netflix Q3 earnings release) Netflix's Q3 results showcased a strong beat in subscriber adds, which is the number-one metric that moves its stock. The recent rally has further steam in 2024, where Netflix has indicated it expects to benefit from a combination of both paid subscriber growth plus pricing tailwinds. The bottom line here: it's a great time to go long on Netflix. Over time, the company could build up more of an experienced business as Disney has. The company is building off its pop-up Netflix Bites cafe experiences to create more physical/offline destinations for Netflix fans, which it is branding as "Netflix House". Due to a combination of strong membership growth, more efficient headcount levels, and more disciplined content spending as outlined above, Netflix is generating record operating profits. We're likely moving toward a near-term future in which the major streaming giants will stop trying to outspend each other on content and focus instead on core franchises. ![]() An end to the content arms race? In its most recent earnings quarter, Disney (arguably Netflix's most serious competitor, when considering the market share of Disney+ and Hulu combined, announced that it would reduce its content volume to focus on quantity.And with the company noting success in paid family sharing, the company has the opportunity to increase spend per household as well, versus its prior unlimited password-sharing model. After all, when most competing streaming services are raising prices, the alternatives aren't as appealing. Netflix's financials (which we'll discuss in the next section) have shown that subscribers have virtually shaken off any reaction to the recent price increases. The company is enjoying the benefits of price increases at a time when many competitors are raising prices.Here are a number of other core bullish drivers for Netflix: Thankfully, the strike ended before the lack of fresh content was able to do any meaningful harm to Netflix's business - the company was still able to release most of its flagship Netflix Originals this year, including new seasons of The Crown, Bridgerton, and The Witcher. ![]() ![]() The first and foremost, of course, is the end of the Hollywood strikes that have put writers and actors on the sidelines, delayed hundreds of highly anticipated projects, and sapped billions out of the Los Angeles economy. The leading streaming platform has seen its share price rise ~50% year to date, but in my view there's still plenty of wind left in Netflix's sails to keep rallying.ĭata by YCharts Netflix enjoys several catalysts to continue powering share price appreciationĪ confluence of positive drivers for Netflix makes now the opportune time to buy. Netflix ( NASDAQ: NFLX) is a top-notch example here. That doesn't mean, however, that these tech giants with fantastic fundamentals can't and won't make great investments in 2024, especially when there are a number of catalysts underneath their belts to drive growth. With markets careening back to YTD highs driven by the promises of lower inflation and lower interest rates, large-cap tech stocks are very much back in fashion. ![]()
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