How To Analyze Netflix’s Financials
Before investing in a company, it’s smart to do some research. This helps you form a more informed decision on whether the stock is a good buy or not.
It’s also smart to take a look at the company’s competitors. Netflix’s competitors include Disney, Apple, and Amazon, all of which offer streaming and original content, along with tons of other diverse services. For example, Amazon offers Prime Video, eCommerce, electronics, and a lot more. It’s important to compare Netflix’s financials and growth against the competition.
Here are some things you can look at to evaluate a stock. Most brokerages will provide a summary of the main numbers for each company, as well as a chart of its historical performance.
How To Invest In Netflix Stocks
While watching your favorite TV series on Netflix, you must have wondered how to invest in Netflix shares and make possible profits.
But do you know? Investment in a stock requires the balance of expertise, market research, and experience. But it doesnt mean that you cant have a profitable stock trading experience if you are new to trading.
For that, follow a step-wise approach, so that you dont miss any important pointer. For instance, even if a companys financial report is flawless and its share price is also going strong, that doesnt always mean that the stock is an ideal fit for you.
Because you may have already invested a fair-share of your resources in the high-growth technology stocks and makes little sense to invest more in the same sector, or the money you could invest is already tied up somewhere else.
Another consideration is time. If youre looking to make considerable profits in less than five years, then stock trading is not the best choice for you.
One of the way to make investment decision is to have an unobstructed view of your financial goals, which includes how much you can invest, and how diversified your investments are.
If you think you can invest your money for a minimum of five years, investing in Netflix stocks is an ideal fit for you.
What Is The Trade
Rather than buying the stock outright, an investor who fundamentally likes the company but might fear further weakness can write a 1-month cash covered put on the shares:
The proposed trade represents the selling of a put option with a May 20th, 2022 maturity date and a strike of 222.5 which is close to the spot levels. By entering this trade, the put seller receives a premium of $1,320. As an option seller an investor has the obligation to perform as the option buyer chooses on expiration date, namely on May 20th 2022.
The potential outcomes for the trade are as follows:
1) On May 20th the NFLX stock price is lower than 222.5
- the option will be exercised and the investor will purchase the stock at a net price of 209.3 per share which represents an approximate discount of 6% to current spot levels
- the investor will need to have $20,930 in cash in their brokerage account in order to purchase the shares
2) On May 20th the NFLX stock price is higher than 222.5
- the option will not be exercised and the investor will end up pocketing the premium of $1,320
- considering the maximum amount of cash, the investor needs to hold in their brokerage account this premium represents a 71.2% annualized yield on the respective cash
- basically, an investor can continue to place the same trade each month this year and if it does not get exercised the net pocketed amount will be $1,320 x 12
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Buying Netflix Shares Conclusion
- If you’re comfortable buying shares directly with one of the many US share investing platforms, it has never been easier for New Zealanders to own Netflix shares.
- Before buying Netflix shares, make sure you’re 100% comfortable with the company. If you’re a long-term investor, ask yourself whether you’re happy to buy and hold this share for years to come.
What Does Netflix Make
Netflix provides subscription-based streaming video services. The service allows consumers to watch movies, TV shows, and documentaries on any device, via the internet. Netflix purchases most of the content on the platform but does produce original content too. In 2020, Netflix spent $17 billion on content.
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Is Netflix Stock A Good Stock Investment Now
That depends on your goals and risk tolerance. If youre looking for long-term returns, then yes, Netflix stock may be a good investment now. However, if youre looking for immediate gains, then you may want to wait until the market conditions are more favorable for investing in streaming services such as Netflix.
Buy Shares Of Netflix Directly
The most common way to purchase shares of a company is through a brokerage account.
After you open a brokerage account, you need to place a buy order to buy shares of Netflix.
Within your brokerage account, you can typically choose to use a market order or a limit order to purchase NFLX shares.
A buys the number of shares you requested at whatever price the stock is trading for on the market at that time.
A market order focuses on purchasing shares quickly rather than at the best price possible.
A limit order, on the other hand, allows you to set a maximum share price youre willing to buy shares at. This can help you make sure you dont pay more than you want for your shares of Netflix.
However, if the order cant be fulfilled at or below your limit order price, the transaction wont go through and you wont buy the shares.
This can be frustrating but can keep you from overpaying for a stock.
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The Streaming Giant Could Be Back On The Road To Growth
Netflix‘s stock has been beaten down in 2022, suffering from a perfect storm of increased competition, rising inflation, and comparisons against 2021, when millions of home-bound consumers flocked to streaming platforms. As a result, the company’s stock has plunged 53% since January.
The majority of its losses came on April 20, when its share price fell 37% in a single day after Netflix revealed a loss of 200,000 subscribers in the first quarter of 2022. The subscriber declines sent investors running for the hills, as they represented the first losses in a decade.
However, Netflix has responded by making swift changes to its business and restructuring its streaming strategy. The company’s ability to quickly adapt to a changing market, along with an improved second quarter and a glowing third quarter, make Netflix stock an excellent buy. Here’s why.
Analysts Are Revising Prices Targets For These 10 Stocks
In this article, we will take a look at the 10 stocks that recently received revised price targets from analysts. If you want to see some other companies on the list, go directly to Analysts are Revising Prices Targets for These 5 Stocks. U.S. stocks inched lower on Thursday morning as the 10-year Treasury yield
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Capitalcom Best Cfd Broker To Buy Netflix Shares In South Africa
Our number one recommended broker in South Africa is Capital.com. Strictly speaking, Capital.com is a CFD broker rather than a because all positions are held in the form of CFDs, or contracts for difference. From the point of view of investing or trading there is little practical difference between holding shares or CFDs on shares. However, CFDs do allow you to use leverage of up to 5 to 1 on stocks, and short sell shares very easily. So Capital.com is a good choice if you are wondering how to buy Netflix shares in South Africa using leverage.
The Capital.com trading platform lists a wide array of stocks, ETFs, currencies, cryptocurrencies, commodities and indices. Crypto traders will find one of the widest ranges of digital coins that can be trades as CFDs. Trades are also commission free, and the platform is well known for its competitive spreads.
Capital.com gives you several trading platforms to choose from. Thereâs a browser-based platform and a mobile app which are both easy to navigate around. For more advanced trading, the platform can also be integrated with MetaTrader4. And for advanced technical analysis, clients have access to the Trading View website.
For clients in South Africa, the minimum deposit is just $20, which is about R300. Capital.com is regulated by the FCA in the UK and by CySec in Cyprus.
75.26% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
How To Start Investing In Netflix Stocks
Once you have created an account on an online trading platform, find the Netflix stock and begin trading. Most highly rated trading platforms allow you to use a limit order to delay your purchase until the stock reaches a certain price.
Its important to evaluate your budget against a diversified portfolio to minimize risk through market fluctuation. Your broker can also guide you to purchase a fractional Netflix share.
Trading platforms lets you optimize your portfolio by tracking how your stocks are performing, with an eye for the long term.
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Should I Buy Or Hold On To My Netflix Stock Investment
Netflix stock is down 3% on Monday morning after revealing their second quarter earnings report. The company reported profits of $1.63 billion, up 33% from the same quarter last year, however revenue was lower at $7.057 billion as compared to the $7.8 billion expected by analysts.
The company attributed lower revenue to a global shift towards streaming services such as Amazon Prime Video and Hulu which eat into Netflixs traditional DVD and Blu-ray rental business.
Netflix also announced that they will not be releasing any new seasons of their original series for the next two years in order to focus on new productions. This news sent NFLX stock tumbling in early trading on Monday morning and is currently valued at $335 per share, which is down from its all-time high of $404 per share hit in December 2017.
Should you buy or hold onto your Netflix stock investment? At this point its hard to say given the recent volatility in the market, but overall NFLX still looks like a strong long-term investment with plenty of upside potential if current trends continue.
How To Invest In Netflix Via A Fund
Investing directly in individual stocks will, hopefully, be a profitable experience. It may also qualify you for shareholder perks specific to the company in question.
It can also leave you vulnerable to stock market volatility and unforeseen swings in share prices. Nowadays, even a solo tweet let alone a full-blown geo-political conflict can send shock waves through the stock market.
Thats why, financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold hundreds, if not thousands, of company shares.
Being a large component of the NASDAQ index, Netflix is found in many active and passive funds incorporating a bias towards the U.S.
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How Do You Invest In Netflix Stock
If youre looking to invest in Netflix stock, there are a few things to keep in mind. First, youll need to understand the companys business model and how it operates. Second, youll need to understand the streaming giants current financial condition and outlook. Finally, youll need to evaluate Netflixs potential growth prospects.
Netflix is a global entertainment powerhouse that provides content across multiple devices and platforms. The company generates revenue through subscription fees and advertising sales. In fiscal year 2017, Netflix generated $13.3 billion in revenue, up from $11.8 billion the previous year.
The company has been able to grow its revenue largely due to its expanding footprint across both physical and digital media platforms as well as increasing subscription rates among its core customer base of international consumers aged 18-34 years old.
Netflix is currently trading at around $317 per share, which gives it a market capitalization of approximately $136 billion as of this writing . Based on these figures, Netflix stock seems like a good investment given its strong growth rate and overall solid financial position. However, investors will want to be aware of the risks associated with investing in any
How To Sell Your Netflix Shares
When you want to sell your Netflix shares, log in to your trading platform, type in the ticker symbol and select the number of shares you want to sell.
If youve made a profit, you may have to pay Capital Gains Tax on the sale of your shares. However, as mentioned earlier, this is not the case for tax-exempt wrappers such as Individual Savings Accounts.
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Fund Your Trading Account
To fund your trading account, you’ll have to send your broker a bank wire transfer or make a deposit through your debit card. Some brokers don’t accept as a means of funding an account.
Remember, there’s a chance that you could lose on your investment, so don’t put in any more than you can afford to lose. Make sure you understand and practice the principles of risk management when funding your account and placing trades.
What The Bears Are Saying
- Netflix isnt the only streaming company:When Netflix launched, it was up against big cable TV companies. Now, its up against huge content houses with deeper pockets – including Apple, Hulu, Disney, and Amazon Prime.
- Content production overheads can be high:Netflix has moved into producing ‘Netflix Originals’. But this comes with substantial production costs and higher risks.
- Content has to stay desirable:As a Netflix subscription can be canceled at any time, the pressure is on to offer quality content and retain customers
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How To Buy Netflix Shares Fees For Investing In Netflix Stocks
You have to count with different kind of fees when you are trading with Netflix shares.
Commission is a fee, based on the traded volume or a flat fee per trade. For example, 0.1% of 10,000, $5/trade or $0.005/share.
Needless to say, these are different at each broker. Let’s see the fees for trading with Netflix shares at our recommended three brokers:
Its Revenue Growth Is Still Decelerating
Back in April, Netflix rattled investors with its first sequential loss of subscribers in over a decade. It mainly blamed that slowdown on tougher competition in the streaming space, the impact of the Russo-Ukrainian war, and users sharing their passwords. It said it would crack down on those shared passwords and roll out a cheaper ad-supported tier to attract new users, but those moves also suggested it was running out of ways to gain new subscribers.
During the third quarter, Netflix’s number of paid subscribers grew again as hit shows like Stranger Things, Monster: The Jeffrey Dahmer Story, Extraordinary Attorney Woo, The Gray Man, and The Sandman drew in more viewers. It expects its number of paid subscribers to grow 2% sequentially to 228 million in the fourth quarter.
Data source: Netflix. YOY = Year-over-year.
Netflix’s stabilizing subscriber growth is encouraging, but its revenue growth continues to cool off. It attributes that slowdown to its growing dependence on international markets, which generate lower revenue per subscriber than its slower-growth U.S./Canada market, as well as the rising dollar’s impact on its overseas revenue.
That’s why it only expects revenues to rise less than 1% year-over-year — and decline nearly 2% sequentially — to $7.78 billion in the fourth quarter. However, that amounts to a 9% year-over-year increase under constant currency terms.
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My Investments In Netflix Stocks Are Protected
Although, modern online trading platforms use secure authentication and encryption systems, there are some additional safety precautions you can take to minimize the threats.
Heres what you can do:
- Use secure passwords with a mixture of alphabets, numbers, and symbols.
- Avoid using passwords including your name, surname, etc.
- Frequently change your account password.
- Only use online trading portals that use OTP based authentication.
- Dont use your trading account on a public Wi-Fi.
- Never share your account credentials on social media, WhatsApp, or SMS.
Watch Out For Currency Conversion Fees
Buying a U.S. stock from Canada likely means converting Canadian dollars to U.S. dollars , unless you have a U.S. dollar bank account at a Canadian bank and only buy American stocks with American funds. Otherwise, you will be charged 1% to 4% of the stocks value on both sides of the transaction by your brokerage as part of their service of converting your currency.
The only other way to bypass these fees, besides reserving U.S. dollars for U.S. stocks, is to perform Norberts Gambit.
This so-called gambit is when you buy a stock or ETF thats interlisted on American and Canadian stock exchanges. You buy Canadian shares of that stock or ETF, then you ask your brokerage to journal over your Canadian shares and turn them into American shares of the same stock, you then sell your American shares in U.S. currency and can use the U.S. dollars that result to purchase any American stock or ETF you want, like NFLX, without converting currency. You pay commission for both transactions, but save on the conversion fees.
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Netflix Has Emerged Victorious From The Coronavirus Crisis
In the first quarter of 2020, Netflix generated nearly $5.77 billion in revenue, a year-over-year growth of 27.6%. Its operating profit was $958 million, with an operating margin of 16.6%. Due to the global quarantine, the number of users subscribed to the platform increased to 182.86 million, an increase of 22.8% compared to the first quarter of last year. Netflix gained 15.77 million new subscriptions, 7 million above estimates.
The market responded optimistically and raised its share price to an all-time high. However, the company perceives that the unexpected growth experienced as a result of the quarantine may take it away from its normal organic growth trend of previous years. It, therefore, expects slower growth as the quarantine is gradually lifted in different countries.
Over the past five years, Netflix has managed to increase the number of global streaming subscribers by about 25% per year on average. In 2019, annual subscriber growth slowed to almost 20%.