Recent earnings results from Netflix Inc. (NASDAQ:NFLX) have resulted in a skyrocketing share price in recent days. Investors appear to be getting excited with the future prospects of this growing platform.
Netflix recently reported earnings, much to the cheer of investors and the market in general. The company posted impressive subscriber growth, beating the estimates of most analysts and exceeding my expectations as well. The company is currently on pace to become cash flow positive, and have less reliance on bond issuances for new content development. This is perhaps the biggest contributor to its stock price rise of late, with the company’s burgeoning debt load becoming a concern for some conservative investors.
Netflix is a solid long-term growth play, with excellent organic growth globally. While I do see the launching of Peacock, HBO Max and the rise of the Disney+ (NYSE:DIS) platform as headwinds for this company over the medium-term, Netflix’s premium market position and the lack of churn that has arisen in recent quarters is a testament to the brand value this streaming platform has.
This is not a cheap stock right now, and a tremendous amount of growth is built into Netflix’s valuation at present. That said, for bullish investors who believe this company can continue to grow faster than estimates suggest over the long-haul, this could continue to be an outperformer in the stock market. Personally, I’m on the sidelines with Netflix as I view the stock price at these levels as untenable, but for growth investors, this seems like a decently-priced option compared to the valuation of other tech names right now.
Invest wisely, my friends.
