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Netflix, Inc. (NFLX), based in California, is a trailblazer in the streaming industry. Thanks to its extensive content library and global presence, it transformed from a small DVD rental service to a major player in the market. Boasting a market cap of $273.2 billion, the company has been heavily investing in original shows to maintain its leadership position amid competition from new entrants like The Walt Disney Company (DIS).
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and Netflix fits right into that category. Its market cap exceeds this threshold, reflecting its substantial size, stability, and influence in the streaming sector. Netflix has built strong customer loyalty through digitization, content licensing, and artificial intelligence (AI)-powered personalized recommendations, which also help to expand its customer base and boost engagement.
The streaming company has fallen 4.9% from its 52-week high of $664.25, which was hit recently on May 29. Shares of Netflix have surged 2.6% over the past three months, slightly outperforming the broader Nasdaq 100 Index’s ($IUXX) 2.4% surge over the same time frame.
Over the longer term, NFLX is up 29.7% on a YTD basis, and the stock has soared 57.7% over the past 52 weeks. By contrast, IUXX is up 10.9% in 2024 and 28.2% over the past 52 weeks.
To confirm the bullish price trend, NFLX has been trading above its 50-day and 200-day moving averages since November, with some fluctuation since mid-April.
NFLX's impressive performance can be attributed to several factors, including robust subscriber growth. The company's expansion of its ad-supported streaming service and efforts to curb password sharing have been successful, with 9.3 million paid subscribers added in the first quarter alone.
Additionally, Netflix is expanding into mobile gaming with a growing portfolio of over 75 games, including popular titles like "Grand Theft Auto," "Love Is Blind," "Monument Valley," and "Oxenfree," positioning itself as a significant competitor in the industry. Besides, the company’s management also plans to enter the cloud gaming market to enhance its current offerings.
To emphasize the stock’s robust performance, it is worth noting that Netflix’s top rival, Walt Disney, underperforms NFLX. DIS stock has surged 13.8% over the past 52 weeks and 13.8% on a YTD basis.
In sync with NFLX’s impressive price performance, analysts are optimistic about the stock’s prospects. The stock has a consensus rating of “Moderate Buy” from 39 analysts covering it, and the mean price target of $649.50 is a premium of 2.8% to current levels.
On the date of publication, Kritika Sarmah 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.
