Netflix stock is flirting with a buy zone as the streaming video leader grows its advertising business. Also, the company's lower-priced, ad-supported service tier has given its subscriber count a boost.
On the stock market today, Netflix stock rose 0.8% to close at 686.80.
Netflix shares are just below a buy point of 697.49 from a cup base, according to IBD MarketSurge. NFLX stock hit that buy point on Aug. 20 and reached an all-time high of 711.33 that same day before pulling back.
In a bullish sign, Netflix stock found support at its 50-day moving average line. It also didn't fall into the stop-loss sell zone from its Aug. 20 breakout.
Netflix stock has seesawed since the internet television network delivered second-quarter results and guidance on July 18. The Los Gatos, Calif.-based company beat Wall Street's Q2 targets but offered a soft revenue outlook for the current period.
Netflix Stock Is On Two IBD Lists
In its Q2 report, Netflix noted that its ad-tier membership grew 34% quarter on quarter. Also, the advertising-supported service now accounts for over 45% of all sign-ups in its ad markets.
The company expects to achieve critical ad subscriber scale for advertisers in its ad countries in 2025.
Research firm eMarketer reported earlier this week that Netflix's ad revenue growth has accelerated for the past three quarters. Netflix's ad growth also is outpacing that of streaming video platform Roku.
Netflix stock is on two IBD lists: IBD 50 and SwingTrader.
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