Netflix (NFLX) Stock Price

Netflix Logo

BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.

By every measure, Netflix stock has been a major winner since its IPO. It has even rewarded recent investors quite lavishly. According to some pundits, even at $350, it is a great buy.

What exactly do we have on our hands with Netflix stock though?

Having started out in 1997, Netflix is by no means a new player on the block. Back in those days, it was a mere mail delivery service, focused on movies and TV shows.

From those humble beginnings sprang forth a company which is beyond the shadow of a doubt the dominant force in streaming today.

When the company went public in May, 2002, one share cost $15. Nowadays, the share price is around $350-360. Doing the math there is easy enough. If you had invested just shy of $1k right after the IPO, you would now have more than $300k.

Even better buying opportunities came about after the initial IPO-generated hype died off. As it often happens with tech stock, Netflix took a dive. It went from the $15 IPO price to a little over $4. Had you bought in then, you would have made off even better than detailed above.

One major milestone in the existence of Netflix stock came about in 2004. The company issued a stock split. Every Netflix share became two shares, with the value split evenly. From that point on, the share price grew quite steadily, with a drop/correction peppered in every now and then.

What moves the needle on Netflix stock?

There are currently two major factors to consider when attempting to predict the future value of Netflix shares: cash burn, and more importantly, competition.

Competition has always been the defining factor of Netflix’s existence. It effectively secured its domination of the market by disposing of Blockbuster. This is a different day and age however. Netflix’s competitors of nowadays are Apple, Disney and Amazon – all tech heavyweights, to say the least.

Above and beyond actual market encroachment, Netflix’s competition also exacerbates the cash burn of the company. In 2019, the company is expected to burn through some $3.5 billion. The pressure in this regard is not likely to alleviate before 2020 either.

Prices can always be tinkered with. Netflix can attempt to make things more efficient in this regard. Hot competition hardly leaves room for such maneuvers though.

What are Netflix’s competitors up to?

Disney is set to launch Disney + in November. The cost of the service is said to be $69 per year, which makes it much more attractive than Netflix. Obviously however, the content delivered through Disney+ will be different from Netflix’s current offering.

Apple has joined the streaming fray by announcing the launch of its Apple TV+, also slated for the fall of 2019.

Netflix is already feeling some sort of a squeeze, as its subscriber growth has stumbled. According to the company however, this is most likely due to high prices, rather than the new competitors popping into the picture.

BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.

Please join the Netflix (NFLX) Stock Price discussion

Your email address will not be published. Required fields are marked *