Netflix (NFLX -1.21%) said the final season of Stranger Things passed a major milestone, drawing more than 1.1 billion hours of viewers.
This is further evidence of Netflix’s ability to develop programming that consumers want. It comes as the company grapples with losing subscribers to increasing competition and dwindling consumer demand for home entertainment.
Stranger Things, the eyeball magnet
Interestingly, Stranger Things became only the second Netflix show to surpass one billion hours of viewing. The second, Squid Game, was a popular Korean-language thriller that received word of mouth. Viewership numbers like this are a good sign for Netflix subscriber retention. This may interest you : Deadly Netflix crash prompts Mexico to investigate hiring practices. As long as it produces hits like this, people will be willing to pay a monthly fee for the service. In fact, the show was so popular that it briefly crashed the Netflix app as viewers flocked to watch it.
However, it remains to be seen whether the hit has helped attract new subscribers to the service. The company lost 200,000 subscribers in the first quarter ended March 31, its first such loss in more than 10 years. Management predicted it would lose 2 million more in the second quarter, but that was before it knew Stranger Things would pull in more than a billion hours of viewers. There is a real possibility that the excitement about the series has attracted new subscribers.
That would do wonders for Netflix, whose share price is down 73% from its peak. The company thrived when billions of people spent more time at home in the early days of the pandemic. Now that there is more demand for out-of-home experiences, people are spending less time at home streaming content. That’s why Netflix has announced two rounds of job cuts to maintain profit margins as revenue growth slows. The company is also planning an ad-supported tier to attract cost-conscious customers who have been hesitant to subscribe.
After all, viewers pay for streaming services. The popularity of Stranger Things is further evidence of Netflix’s ability to create content that appeals to consumers. This ability is what will drive shareholder returns over the long term. If a streaming provider can’t keep refreshing the service with new and exciting content, it will lose subscribers to a service that can.
What this could mean for Netflix investors
Netflix is relatively new to the content creation game. It has less of a proven track record than rivals such as Walt Disney (DIS -1.61%) , which has delivered hits for decades. This lack of proven track record is a drag on the stock price as investors see Netflix as riskier. The fact that Stranger Things has reached over 1 billion hours of viewing is another notch on its belt that will help reduce its risk in the minds of investors.
It might also be a great time for potential investors to add Netflix stock to their portfolios. The results of Stranger Things have not yet been reflected in the company’s financial statements. Read also : The final guide to What’s on Netflix, HBO Max, Amazon, and More by July 2022.. It reports second-quarter earnings on July 19. Investors considering adding to Netflix stock may want to do so before that date, when management will reveal the impact the hit series is having on revenue and subscriber growth.
Parkev Tatevosian has positions in Netflix and Walt Disney and has the following options: $105 long calls on Walt Disney in January 2024. The Motley Fool has positions and recommends Netflix and Walt Disney. The Motley Fool recommends the following options: Long Walt Disney $145 January 2024 calls and Short Walt Disney $155 January 2024 calls. The Motley Fool has a disclosure policy.
Parkev Tatevosian has positions in Netflix and Walt Disney and has the following options: $105 long calls on Walt Disney in January 2024. The Motley Fool has positions and recommends Netflix and Walt Disney. The Motley Fool recommends the following options: Long Walt Disney $145 January 2024 calls and Short Walt Disney $155 January 2024 calls. The Motley Fool has a disclosure policy.
Netflix’s financial outlook is currently bad enough that the company has begun cutting costs after losing 200,000 subscribers last quarter — with 2 million more expected this quarter.
Is Netflix undervalued?
During the post-earnings decline, Netflix shares entered Morningstar Rating 4-star territory and are now the most undervalued since 2014. Read also : Streaming in Canada on Amazon Prime Video, Apple TV + Crave, Disney + and Netflix [July 4-10]. Walt Disney (DIS) and Warner Bros.
Is it a good idea to buy Netflix stock now? Netflix is a fantastic buy right now. You should keep in mind that we are looking at the original, largest and most mature market in one country in the Netflix portfolio above. The potential for incredible growth is even greater when you consider the global streaming media market.
Is Netflix now undervalued?
Puck’s Matthew Belloni and Tom Rogers, CEO of Engine Media and founder of CNBC, join CNBC’s ‘Squawk Box’ to react to Disney’s latest quarterly earnings report.
Is Netflix a good investment 2022?
As of July 5, 2022, Netflix Inc had a market cap of $79.9 billion, compared to the online service median of $313.7 million, Netflix Inc shares are down 69.4% in 2022, down 2.5% in the previous five trading days and by 65.2% in 2022. the previous year. Currently, Netflix’s price-to-earnings ratio is 17.8.
Is Netflix a buy sell or hold?
Netflix received a consensus rating of Hold. The company average rating is 2.10 based on 10 buy ratings, 23 hold ratings and 6 sell ratings.
What is Netflix target price?
| high | $635.00 |
|---|---|
| Low | $150.00 |
| Average | $283.53 |
| Current price | $174.87 |
Is Netflix a good investment in 2022? As of July 5, 2022, Netflix Inc had a market cap of $79.9 billion, compared to the online service median of $313.7 million, Netflix Inc shares are down 69.4% in 2022, down 2.5% in the previous five trading days and by 65.2% in 2022. the previous year. Currently, Netflix’s price-to-earnings ratio is 17.8.
Why Netflix will fail?
The real reason why Netflix is failing One word: competition. Back in the day, Netflix got a lot of old TV shows and movies from Hollywood. Now that everyone has realized the power of digital streaming, many of these old movies and shows are streaming on their producers’ platform.
Why is Netflix losing so many customers? According to experts who closely monitor the streaming industry, there are several factors beyond the company’s control, such as inflation forcing customers to cut back and Netflix having to shut down its service in Russia, losing 700,000 customers.
What problems does Netflix face?
With Netflix losing subscribers for the first time in more than a decade, it faces a new challenge of stagnation from a position of strength. A drop of just 200,000 users — less than 0.1 percent of its total customer base — was enough to send Wall Street into a panic, with shares plunging more than 30 percent on Wednesday.
Why Netflix will lose?
The research firm cited price increases as the reason for the exodus of Netflix subscribers. A lack of interesting content could also be one of the factors why Netflix’s subscriber base is witnessing a decline. Another reason Netflix may be losing subscribers is its reliance on original content.
Is Netflix losing its popularity?
Netflix got off to a rocky start in 2022. In the first quarter, the streaming giant reported a loss of 200,000 subscribers, the first time in more than 10 years. In addition, Netflix expects to lose another 2 million subscribers in the second quarter of 2022.
Is Netflix having a problem?
We currently do not have an outage on our streaming service. We strive to bring you the TV shows and movies you want to watch, whenever you want to watch them, but on very rare occasions there may be service outages.
How do I check if Netflix is down? If you’re ever wondering if Netflix is really down or if it’s just you, check out the “Netflix is down?” page in the streaming service’s help center.
