How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Netflix (NFLX) ten years ago? It may not have been easy to hold on to NFLX for all that time, but if you did, how much would your investment be worth today?
Netflix's Business In-Depth
With that in mind, let's take a look at Netflix's main business drivers.
Netflix is considered a pioneer in the streaming space. The company evolved from a small DVD-rental provider to a dominant streaming service provider, courtesy of its wide-ranging content portfolio and a fortified international footprint. At the end of the fourth quarter of 2022, the company had 230.75 million paid subscribers globally.
Netflix has been spending aggressively on building its portfolio of original shows. This is helping the company sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon prime video.
Netflix streams movies, television shows and documentaries across a wide variety of genres and languages. Domestic and international subscribers can watch them on a host of internet-connected devices, including television sets, computers, and mobile devices.
The Los Gatos, CA-based company reported revenues of $29.70 billion in 2021.
Beginning fourth-quarter 2019, Netflix started declaring revenues and membership data by regions — the Asia Pacific (APAC); Europe, Middle East & Africa (EMEA); Latin America (LATAM); and the United States and Canada (UCAN).
UCAN accounted for 45.8% of fourth-quarter 2022 revenues. At the end of the quarter, the company had 74.30 million paid subscribers in the region.
EMEA accounted for 29.9% of fourth-quarter 2022 revenues. At the end of fourth-quarter 2022, the company had 76.73 million paid subscribers in the region.
LATAM contributed 13% of fourth-quarter 2022 revenues. The company had 41.70 million paid subscribers in the region at the end of fourth-quarter 2022.
APAC accounted for 10.9% of fourth-quarter 2022 revenues. The company had 38.02 million paid subscribers in the region at the end of fourth-quarter 2022.
In the Domestic DVD segment, Netflix delivers DVDs through the U.S. postal service from distribution centers located in major U.S. cities. Revenues from the DVD segment were $33.6 million in fourth-quarter 2022.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Netflix ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2013 would be worth $14,425.46, or a 1,342.55% gain, as of April 10, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 164.28% and the price of gold went up 23.71% over the same time frame.
Analysts are anticipating more upside for NFLX.
Netflix added 7.66 million paid subscribers globally in fourth-quarter 2022, higher than its estimate of gaining 4.5 million users. Average revenues per membership declined as Netflix continues to face stiff competition in the streaming space from the likes of Apple, Amazon prime video, HBO Max, Disney+, Peacock, Paramount+ and TikTok. Moreover, Netflix’s leveraged balance sheet and higher streaming obligation are also concerns. Nevertheless, Netflix is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. Netflix currently expects paid net additions to be greater in the second quarter of 2023 compared sequentially. Shares have outperformed the industry year to date.
The stock is up 15.91% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2023. The consensus estimate has moved up as well.
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