If you take a glance at some of the articles written about Netflix (NASDAQ:NFLX) in the past six months, you’ll notice a trend beginning to emerge as regards Netflix stock. Writers and media personalities alike love to forecast the company’s demise.
But if you look beyond the headlines to the 31 Wall Street analysts who have ranked Netflix stock over the past three months, this same narrative doesn’t quite pan out. As it turns out, 25 analysts gave the stock a buy rating, five a hold rating, and only one recommends selling the stock. The average price target is $411.46, representing an upside of over 40%.
For years, the company has had no real competition and that is about to change. But NFLX stock will rebound so potential investors should take advantage of the discount and current investors need to hang in there.
1. Disney and Apple Will Not Replace Netflix
Some people are under the impression that you can only subscribe to one streaming service. But the average consumer subscribes to 3.4 streaming services. Which makes a lot of sense when you think about it.
Most of us spent years paying for cable which costs an average of $107 per month. If you subscribe to Disney and Netflix’s streaming services, you’ll pay $19.98 per month. Is that so out of reach for the average person?
And I’m just not sold on the idea that either Disney or Apple can replace Netflix for most consumers. After all, how many times can you watch Avengers: Endgame?
2. Netflix Stock and Original Content
For most consumers, the biggest reason they stick with a streaming service is the amount of interesting content. And this certainly seems to be the case with Netflix. Every time Netflix reports a dip in subscribers, it’s because the company didn’t produce as much original content that quarter.
That’s why the company spent $8 billion producing original content in 2018. And it would appear that this is money well spent. When Netflix released the original movie Birdbox, it was watched by more than 45 million households in the first week. And customers continue to tune in for popular series like Orange Is the New Black, Stranger Things, Sex Education, and The Umbrella Academy.
3. The Bottom Line on Netflix Stock
Many people are concerned because of the company’s subscriber miss during the second quarter. Netflix’s international subscriber growth was sluggish and it lost U.S. subscribers. But the company still has plenty of room to grow both in the U.S. and abroad.
NFLX said it expects subscriber growth to bounce back during the third quarter. There are still plenty of opportunities for the company to continue to expand its subscriber base in international markets. And its overall subscriber base continues to increase year over year.
Apple and Disney just aren’t the threats many people are making them out to be. Make no mistake, Netflix’s best days are not behind it. The company will continue to be one of the top streaming services for years to come.
As of this writing, Jamie Johnson did not hold a position in any of the aforementioned stocks.