In the past decade, few stocks have achieved as high a return on investment as Netflix. The streaming titan has almost consistently made positive returns as it released new seasons for “Chef’s Table” and “Queer Eye” and increased its user base from less than 50 million to 208 million.
Despite a disappointing earnings report for the first quarter Many investors are seeing Netflix regain a foothold in the long run when Netflix made $ 1.7 billion in profits but drastically fell short of expectations for subscriber growth.
In his Letter to the shareholdersNetflix blamed coronavirus-related production delays for its “lighter content plan in the first half of this year,” but expects to continue producing content as it invests $ 17 billion in its movies and shows this year.
The stock fell 7% at one point after Tuesday’s earnings report.
If you’ve invested in Netflix back in 2011, a bearish quarter isn’t enough to hurt the stock’s uptrend over the years as a whole. The stock has increased almost fivefold in the past 10 years.
A $ 1,000 investment in Netflix on April 20, 2011 would be worth $ 15,252 as of Tuesday, a profit of 1,425%.
That is significantly more than the S&P 500, which grew by 209% over the same period. It’s almost twice as much as it is on Google alphabet 767% growth rate since 2011 and even exceeds it Apples 1,134% growth over the past decade, which would have turned an investment of $ 1,000 into $ 12,339.
In 2011, Netflix had a market cap of $ 13.4 billion. But today, its market cap of $ 243.4 billion is larger than that of Twitter, Grab it and Spotify combined. Its growth was from the Cable cutting revolutionas well as massive investments in the content library.
Netflix, which has been around since 2011 relied on external funding To fund the billions of dollars it spent building its library of big budget projects and deals, it said expects a positive cash flow after 2021.
“While traditional media companies had a toe in the water and a half-blank look at the streaming, Netflix grabbed the bull by the horns and ran with it,” Wedbush Securities CEO Dan Ives told CNBC Make It. catching up in a game that forever changed the media ecosystem. “
Despite its success, Netflix is entering what is perhaps the greatest period of uncertainty with Disney +, HBO Max, and the new Paramount Plus network for subscribers. Disney +, with his grow steadily of high budget television shows based on Marvel properties, is the service’s closest rival, Adding nearly 95 million paying subscribers since the start in November 2019.
Looking to the future, Netflix has 35 nominations for Sunday’s Academy Awards, including two films, “Mank” and “Trial of the Chicago 7”, both of which were nominated for “Best Picture” – an award the studio escaped is. There are also big projects by A-List people like Dwayne “The Rock” Johnson, Leonardo DiCaprio and Martin Scorsese.
And while past results are no indication of future performance, Netflix has held a strong position over the past decade due to its pioneering advantage and its anchoring in culture.
“Whether Microsoft with its home office tools, Google with search or Netflix with streaming – these products have become consumer habits that are as common as breakfast and coffee in the morning,” he says.