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There’s some large information surrounding Netflix (NYSE:NFLX) inventory, together with its acquisition of main WWE rights, a part of its ongoing plan to increase its leisure suite. It has additionally pivoted into gaming not too long ago and has partnered with main business veterans to deliver top-class content material to the sector.
However earlier than I get on to that, right here’s a recent take a look at the corporate’s This autumn 2023 earnings outcomes, launched final evening.
Earnings replace
Netflix’s earnings per share for This autumn this 12 months had been $2.11, a bit of under the consensus expectations of $2.20.
Nonetheless, the corporate reported a pleasant 12.5% improve in income towards the earlier 12 months’s quarter. It additionally added 13m subscribers.
Staggeringly, it additionally reported a web revenue of $938m, an enormous improve from $55m a 12 months in the past.
Co-founder and co-CEO Reed Hastings additionally stepped down from his function. He’ll now function Netflix’s government chairman. To interchange him, COO Greg Peters will be a part of present co-CEO Ted Sarandos within the place.
Based mostly on these earnings outcomes, I feel the corporate goes to have an excellent 12 months forward. It’s acquired some good expansions underneath means, and with the monetary development to go together with it, it’s onerous to complain.
A better take a look at WWE and gaming
The corporate reached an settlement to stream WWE’s weekly TV present, Uncooked, reside throughout numerous nations starting in January 2025.
The transfer signifies the corporate’s enlargement into reside broadcasting. A key a part of the deal is that Netflix will change into the house for all WWE exhibits, specials, documentaries, authentic collection, and upcoming tasks.
Netflix can also be entering into gaming. It began its video-game operations with interactive content material on its streaming platform. Now, it has employed the likes of Mike Verdu, a former government from Meta‘s Oculus and EA.
Less than 1% of Netflix subscribers regularly engage with its games as of August; therefore, the company is attempting to grow this. It has acquired multiple gaming studios and opened its own in Helsinki and California to bolster the effort.
Valuation and other risks
The current results look promising. Yet, the market may have overvalued the stock as a consequence. It has a price-to-earnings ratio based on future estimates of around 32.
Therefore, there is little room for error in the firm’s outcomes to justify the present worth.
Additionally, the corporate may face important points with its online game technique if extra established studios show extra standard. Competitors within the business is fierce, and players are sometimes loyal to particular studios’ work. Breaking into the superior video games market isn’t any imply feat.
Takeaway
Total, Netflix is on a bull run in my view. The agency is anticipating double-digit development for the complete 12 months 2024.
I used to be apprehensive of the inventory a few weeks in the past, however much less so after the latest information and earnings.
Although there are dangers in its new methods, and the valuation is a priority to deal with, the shares are a purchase to me. I’ll probably add it to my portfolio quickly when I’ve some spare money to take a position.
