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Netflix #NFLX is one of the world’s largest streaming services

Netflix #NFLX is one of the world’s largest streaming services

13 August 2020

#NFLX has nearly 200M paid subscriptions worldwide. And also the US market share of 86%. In 2019, the company released 371 content units (films, TV series, documentaries, etc.). In the first two quarters of 2020, the company showed a significant increase in both revenue and net profit compared to the same quarters of the previous year – revenue for the second quarter increased by 25% and net profit by 165%. The company is also capable of generating positive net income. The company’s main competitors are streaming services such as Amazon prime Video, Disney Plus, HBO, and Hulu. Despite the fact that the company has almost nowhere to grow in the United States, it is actively promoting its product in the international market. There are about 60 million paid subscriptions in Europe (England, Spain, France, Germany, Sweden, Norway), as well as 36 million in Latin America (Brazil, Argentina, Chile). However, the company also has problems accessing some Asian countries – India and China.

The company plans to increase its revenue and net profit in relation to the second quarter of 3% and 32.5%, respectively. It is expected that the number of paid subscriptions will grow over the next quarter. Also in the company’s second quarter report, it says they are resuming production. Thus, the company’s attractiveness is based on the sector in which it operates and its strong fundamentals as an industry leader.

Like most IT companies now, #NFLX is an overpriced company, with a P / E multiplier in the 85 region, which doesn’t justify the high price tag. However, there are practically no analogues of this paper on the market, since all its competitors are part of large companies such as Apple (Apple TV +), Amazon (Prime Video). The competition in the sector is quite high. Therefore, #NFLX needs to expand globally to justify the company’s high share price. Until it becomes clear what global growth prospects the company has, I would not recommend buying paper for long-term investment.

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13 August 2020
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