Netflix (NASDAQ: NFLX) is one of the few tech companies that not only managed to stay afloat after the dot-com bubble burst in the early 2000s, but also managed to reach new heights amid the stock market crash due to the coronavirus pandemic.
Today, Netflix is the global leader in online entertainment content, and the current stock price of NFLX rose 373% between June 2016 and April 2020! Today, many are wondering if Netflix’s golden age is behind it, given the fierce competition in the online content marketplace. Let’s see if it’s a good idea to buy Netflix stock in 2023.
Netflix stock price history – fundamental analysis
The publication of the company’s earnings reports has a strong impact on its stock price. Netflix announced its results for the first quarter of 2022, which fell short of market expectations. Shortly thereafter, the current stock price of NFLX collapsed by 35%.
Revenue was lower than expected: $7.78 billion compared to expectations of $7.93 billion. Analysts had predicted Netflix would add 2.5 million subscribers in the first quarter of 2022, but the company lost 200,000. What’s more, Netflix predicts that their number will drop by another 2 million in the second quarter.
What caused the loss of subscribers? On the one hand, we see strong competition from streaming services like Disney, Apple, Amazon, and HBO. On the other hand, Netflix has suspended operations in Russia and deleted all the accounts of users in that country.
Finally, we should not forget that after two years of the coronavirus pandemic and the removal of many restrictions, users are beginning to spend less time at home and use these types of services. Therefore, it is better to consider GOOGL after hours stock price.
On the other hand, Netflix’s net income per share was higher than expected at $3.53 instead of the expected $2.89. Although Netflix went public back in 2002, the company does not pay dividends to its shareholders. This decision was understandable because Netflix was an emerging company that was struggling before going public in 2010.
However, since Netflix is no longer a startup now, and after the skyrocketing prices in the stock markets since 2010, it becomes difficult to justify not paying a dividend.
With new players entering the market that are firmly established in other sectors and already paying dividends to their shareholders, some Netflix investors may prefer to trade their securities for those of competitors.
Netflix stock: Competitors
If you invest in or trade fast-growing stocks like Netflix, know that their golden age is coming to an end sooner or later. The question that will surely arise in the future is how well the company’s business model will be able to stabilize steady growth.
Netflix has strong competitors in its field:
- Amazon with its Amazon Prime Video platform
- Apple with its Apple TV platform
- Disney recently launched its streaming content that is suitable for all age groups; Disney +. The company offers its blockbusters, such as “The Avengers” and “Star Wars.
- HBO Max telecommunications group AT&T.
- TV stations offering their own streaming videos.
Netflix’s competitors have significant financial resources, and Amazon, Apple and Disney are active in their chosen field. Online content or streaming is one way to diversify their revenue sources. If they fail, they won’t jeopardize their core business. So it makes sense to invest in GOOGL stock price targets. Look for more investment options at letizo.com.
Netflix stock: Technical analysis
As we mentioned earlier, Netflix’s initial public offering in the early 2000s did not generate much enthusiasm from investors. Also, most of it disappeared from the market when the dot-com bubble burst.
It was only after the mortgage crisis that Netflix’s share price began to rise. The company’s shift toward content for digital devices (computers, smartphones, tablets, game consoles, etc.) and international expansion have borne fruit.
The company regularly increases the number of its subscribers through the quality of its content — series and movies — at affordable prices.
As the business is rapidly gaining subscribers who can unsubscribe overnight, Netflix must continually invest in new content or it will be overtaken by competitors like HBO or Disney+.