Netflix, Inc. (NFLX), headquartered in Los Gatos, California, operates as a subscription streaming service and production company, providing entertainment services. With a market cap of $399.6 billion, the company offers TV series, documentaries, feature films, and games across various genres and languages.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and NFLX definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the entertainment industry. Netflix remains a dominant force in the streaming service industry, known for its extensive library of over 2000 original titles. The platform has garnered critical acclaim, with its original productions winning an impressive 30 Emmy awards in 2024.
Despite its notable strength, NFLX slipped 2.3% from its 52-week high of $935.27, achieved on Dec. 6. Over the past three months, NFLX stock gained 35.3%, outperforming the Communication Services Select Sector SPDR ETF Fund’s (XLC) 17.4% gains during the same time frame.
In the longer term, shares of Netflix rose 87.7% on a YTD basis and climbed 101.4% over the past 52 weeks, outperforming XLC’s YTD gains of 36% and 40.2% returns over the last year.
To confirm the bullish trend, NFLX has mostly traded above its 50-day and 200-day moving averages over the past year, with some fluctuations.
Netflix's strong performance is due in part to its growing advertising business and expansion into live entertainment. The company's recent focus on monetizing password sharing and offering ad-supported tiers has shown promise, while its first-ever live sports broadcast featuring Jake Paul and Mike Tyson attracted a record-breaking 65 million viewers. This growth strategy has laid a solid foundation for Netflix's continued success in the future.
On Oct. 17, NFLX shares closed down more than 2% after reporting its Q3 results. Its EPS of $5.40 exceeded Wall Street expectations of $5.09. The company’s revenue was $9.82 billion, topping Wall Street forecasts of $9.77 billion. For Q4, Netflix expects revenue to be $10.1 billion.
NFLX’s rival, The Walt Disney Company (DIS) shares lagged behind the stock, with a 26.9% gain on a YTD basis and 23.5% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on NFLX’s prospects. The stock has a consensus “Moderate Buy” rating from the 41 analysts covering it. While NFLX currently trades above its mean price target of $802.50, the Street-high price target of $1100 suggests an upside potential of 20.4%.
