Key Stats for Netflix Stock
- Price change for Netflix stock in last 6 months: -26%
- $NFLX Stock Price as of Oct. 16: $71
- 52-Week High: $125
- $NFLX Stock Price Target: $91
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What Happened?
Netflix (NFLX) reports Q3 results on Tuesday, and investors want to know how it plans to keep growing, Reuters reports.
Competition is rising, and engagement shows signs of fatigue. Co-CEO Ted Sarandos recently said Netflix “is not growing as fast as I want us to.”
He pointed to live programming as a way to speed things up.
LSEG expects revenue to rise 11.8% to $12.87 billion, the slowest Q3 growth in three years.
Several data points worry investors:
- Apptopia says US churn rose 16.6% year over year in Q3, about double the pace of the prior three quarters.
- Apptopia also says downloads in the US and Canada fell 20%.
- Jefferies estimates monthly viewing per member fell to 49 hours in the first half. It was 66 hours in the first half of 2023.
- YouTube has nearly double Netflix’s viewing time in the US, per Nielsen.
Analysts blame the World Cup and a weaker content slate. Netflix also cut about 6% of its workforce.
Longtime content chief Bela Bajaria is leaving, and Peter Rice is taking over.
On the Q2 call, co-CEO Greg Peters said live events punch above their weight. Live will be about 5% of content spend this year but only 1% of view hours.
Still, six of the top ten new member sign-up days in the past five years came from live events.
Netflix also bought the 2030 FIFA World Cup rights for Spain and Andorra.
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What the Market Is Telling Us About Netflix Stock
For Netflix stock, the debate is about growth, not the business itself. Management said view hours grew 2% in the first half. It also said it is only 7% of its addressable revenue market.
Management also said live events can bring slightly higher churn. That is a risk to watch.
Ads are the other bet as Jefferies forecasts ad revenue of $7.5 billion in 2029.
On the Q2 call, Netflix bought back $4.7 billion of shares, its largest quarter ever.
Netflix stock may swing on whether Tuesday’s report shows live and ads can offset slower viewing.
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So what is Netflix stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
