Despite a recent sell-off due to analyst concerns, shares of Netflix Inc. (NASDAQ: NFLX) have risen 48% in the past year, compared to a 4% dip in the S&P 500. Over the period, Netflix has added over $10 billion in market cap. The primary reason is that Netflix still rules the premium content streaming business, despite plenty of competition.
Granted, Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL) have products to challenge those of Netflix, as do cable, fiber to the home and satellite TV providers. That has not stopped the company’s revenue from rising from $3.6 billion in 2012 to $6.8 billion last year. Over the same period, net income rose from $17 million to $123 million.
Morningstar analyst Neil Macker wrote:
Already the largest provider in the U.S., Netflix is expanding rapidly into markets abroad. The firm has used its scale to construct a massive data set that tracks every customer interaction. It then leverages this customer data to better purchase content and produce original material such as “Orange Is the New Black”. We believe that this data and ability to leverage will help Netflix to remain the largest provider in the U.S. and enjoy success in many of its newer markets.
That nicely sums up the consensus that has driven Netflix shares so much higher.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
