Netflix, Inc. (NFLX), headquartered in Los Gatos, California, is a leading entertainment company specializing in streaming services and content production. With a market cap of $302.28 billion, NFLX is a dominant force in the media industry, offering a vast library of movies, TV shows, and original content to a global audience. Competing with other major players in the streaming and entertainment space, Netflix's primary rival is The Walt Disney Company (DIS), known for its expansive content portfolio and streaming platform, as both companies continue to innovate and shape the future of digital entertainment.
Companies valued at $200 billion or more are typically classified as "mega-cap stocks," and Netflix comfortably beats this threshold, suggesting that it is a formidable leader in the entertainment industry. With its pioneering role in streaming services, Netflix has established a strong market presence bolstered by a vast global subscriber base and a continuous stream of original content.
NFLX shares are trading 1.4% below their 52-week high of $711.33, which they hit on Aug. 20. The stock has gained 8.3% over the past three months, underperforming the Dow Jones Industrial Average Index’s ($DOWI) 9.1% returns over the same time frame.
In the long term, NFLX is up 44.1% on a YTD basis, and the shares have gained 63.1% over the past 52 weeks. The Dow has gained 10.3% in 2024 and 19.3% over the past year.
To confirm the mixed price action, NFLX has been trading above its 50-day moving average since mid-August but below the 200-day moving average since early July.
Netflix shares fell 1.5% following its Q2 earnings release on Jul. 18, despite beating Wall Street’s expectations for both EPS and revenue. The company reported a strong 16.8% increase in quarterly revenue and a 44.4% rise in net income, along with the addition of over 8 million new subscribers, up from 5.9 million in the same quarter last year.
However, Netflix’s Q3 revenue guidance of $9.7 billion came in below analysts' expectations, causing some investor concern. Nevertheless, the stock recovered by 2.2% in the next trading session.
Highlighting the contrast in performance, rival DIS has underperformed NFLX and the border index, with a marginal gain on a YTD basis.
Despite NFLX's recent underperformance compared to Dow, analysts are moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from 39 analysts. The mean price target is $695.91, which indicates that the stock trades at a premium.
On the date of publication, Rashmi Kumari 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. For more information please view the Barchart Disclosure Policy here.
