2017’s Best Stocks to Buy: Netflix (NFLX)
Netflix, Inc. (NASDAQ:NFLX) crashed after earnings, and rightfully so. The company’s net adds of 160,000 and 1.53 million in the U.S. and internationally, respectively, was well below the guidance Netflix had given just three months prior. Therefore, to miss expectations by roughly 800,000 subs collectively, investors are wise to worry given how NFLX stock is directly tied to subscriber growth.
Ironically, the same reason that Netflix stock crashed after earnings is the same reason it will be a top performer next year.
Fact is, the market is significantly discounting the implications of a Walt Disney Co (NYSE:DIS) and Netflix partnership for the latter’s stock price. Up until now, Netflix has been overreaching and overpaying for just about any content it can get its hands on. However, once that Disney partnership starts in a few months, Netflix will be in a unique situation where 30% of the box office and all the big films are going straight to Netflix month-after-month.
In other words, Netflix’s content is about to receive a boost unlike any time before, and who knows, the company might even use the Disney bump to raise prices and accelerate growth. Regardless, the increased demand created by Disney content is sure to improve shareholder sentiment, boost subscribers and send NFLX stock back to new highs.