Netflix (NASDAQ: NFLX) It is one of the best shares of the 21st century, and one of the biggest surprises in the last three years.
The flow giant remained dead in 2022 after it reported two straight quarters to reject the growth of subscribers as a result of the epidemic. Since then, the company has broken the password exchange, launch a promotional level and has begun to embrace live sports, it has traditionally avoided.
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As a result, the company returns to the upper and lower lines of strong growth, and the shares have increased over the past three years, reaching a market cap for more than $ 400 billion. Now the management believes that it has a trillion worth of evaluation, according to the report, Wall Street JournalDoing a number will mean to jump over 139% over the next five years, assuming that his share is to calculate his apartment.
Can Netflix get there? Let’s look at its prospects.
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Netflix has laid light on his and the rest of the industry, especially since such inherited media companies Disney They still flow in the flow.
The company added more than 40 million subscribers last year, more than 300 million. The management at the end of 2030 has set 410 million targets, that is, to increase the annual growth rate of annual growth or 18 million subscribers per year. This goal seems to be very accessible to Netflix, which has historically increased its subscriber base from about 25 million to 30 million.
The service has matured in the main markets like North America, where it has 90 million subscribers, or 75% of all broadband households. So a certain slack is expected.
The company has attracted new advertisers, reducing its advertising prices. It is said that 43% of subscribers were united through the level of advertising in February. It’s key, because advertising revenue ceiling is higher than subscriptions. Netflix earns more income because advertising users view more programming. It helps to explain why the company no longer reports subscribers every quarter, although it is supposed to give updates.
Looking at the year 2030, Netflix targets $ 9 billion in advertising for $ 2 billion, as a year of annual income within its program. It also aims to develop $ 10 billion worth $ 10 billion last year.
If Netflix does this, 1 trillion market $ 1 should be a possible purpose.
In six years, the operating income will not be automatic, but Netflix has a number of tails that can help there. First, its advertising business has reached a scale, and the company is expected to disappear Microsoft: As a advertising partner, he uses his own property system. Reaching a scale means that future growth will be more beneficial, as the growing costs of servicing these ads will fall. The same is true for a centralized business side. Netflix can grow subscriptions without spending the content of content, especially since it branches in new categories such as Live Sports, which plans to speed up.
Is streaming stock currently sold a Price-earnings ratio Since 49, that is, significant growth is already a price. This can be challenged to get a $ 1 trillion market cap for a $ 1 trillion market in five years.
However, Netflix does not have to get there to get a good gain or exceed S & P 500In fact, the company seems well positioned for the current trading war, as it offers a service that cannot tariff. Its products are also controversial to save money against movie or live fun, that is, it is in the product that people will be able to use or even use a decline. As of April 14, Netflix shares are higher than April 2 (When President Donald Trump announced global tariffs). It is a sign of that flexibility.
Although the shares are expensive, Netflix’s business flourishes, and it is well positioned to endure chaos and even a decline in the trading war. It’s a great stock to buy it yet.
Before buying a share in Netflix, consider this:
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Jeremy Bouma Has positions in Netflix and Walt Disney. MOTLEY FOOL has positions and offers Microsoft, Netflix and Walt Disney. MOTLEY FOOL offers the following options: Motley Fool has Discovery Policy:A number
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