Netflix (NYSE: NFLX) Remains King of Streaming Despite Mounting Competition

John Smith

Even though there are a lot of new streaming services out there, Netflix will still be the market leader in 2024. With more than 250 million subscribers around the world, Netflix is still far ahead of its rivals, even though Disney+, HBO Max, and Paramount+ have all seen strong growth.

Why Netflix Still Reigns Supreme

Several key factors have enabled Netflix to maintain its streaming crown:

1. First Mover Advantage and Content Breadth

Netflix had a big lead over its competitors when it came out with its streaming service in 2007.

Because it was the first to market, it was able to build up a huge library of material and get a huge number of subscribers before any competitors even started offering similar services.

While the newer streaming services are getting better, none of them can yet match Netflix in terms of the amount and variety of material it has.

2. Willingness to Adapt its Model

Disney and other companies have mostly stuck to family-friendly shows and movies, but Netflix is willing to try new things and take risks.

Netflix doesn’t stick to one strategy all the time. For example, with original hits like Stranger Things, it started the binge-watching trend.

It was also the first major streamer to give an ad-supported tier. This flexibility keeps people interesting.

3. Global Reach and Localization

Since its first move into Canada in 2010, Netflix has had a lot of time to grow abroad. It now has a global presence that is unmatched. Everyone can use the site except for people in China, Syria, North Korea, and Russia.

Netflix has also put a lot of money into localization, which means making shows and movies in languages other than English that are especially made for international markets. It is very hard for competitors to copy this world scale.

Why Investors are Bullish on NFLX Stock for 2024

Given Netflix’s continued dominance, investors have turned bullish on NFLX stock going into 2024:

1. Price Hikes Have Boosted Revenue

Within the past few months, Netflix has raised the price of its top-level US plan from $19.99 per month to $22.99 per month.

It looks like users haven’t complained yet, and Netflix thinks that the price increases will bring in over $1 billion more in 2023. Analysts believe that growth can be sped up by more gradual price hikes.

2. Ad Model Will Unlock New Revenue Stream

It took years, but Netflix finally released a plan with ads in November 2022. It cost $6.99 a month in the US. Netflix has found a new way to make money with this long-overdue change.

Morgan Stanley thinks that Netflix’s ad business could bring in $4.6 billion a year in the long run.

3. Profit Margins Set to Expand

Analysts think that Netflix will make a lot more money after they start showing ads and raise the prices of their paid plans.

The streamer wants its operating margin to be between 22 and 23% in 2024, which is a big increase from its previous goal of 20%. NFLX margins are about to hit all-time highs because sales are rising faster than costs.

4. Competitive Moat Still Significant

Streaming services like Disney+, Hulu, and HBO Max are getting better, but they are still far behind Netflix when it comes to things like content volume, original programs, and global reach.

They will have to play catch-up for years before they can really compete with Netflix in streaming.

What Could Go Wrong for Netflix

There are still risks that could make someone take Netflix’s place as the leader in streaming. A clear threat is competitors who keep spending billions on material to get subscribers to leave.

A possible slowdown in 2024 that makes it harder for people to spend money is another problem for subscriber growth.

Also, people are still not sure if Netflix can keep making hit shows even though they’ve lost important writers like Ryan Murphy and Shonda Rhimes. And the streamer has to deal with ongoing crackdowns on password sharing in 2024, which may make some users angry.

Still, most experts are still sure that Netflix will be the leader in streaming services through 2024 and beyond because the company is flexible and has a huge head start.

Let’s Look Netflix Stock (NYSE: NFLX) Statistics

Total Valuation

Market Cap208.10B
Enterprise Value217.43B

Stock Price Statistics

Beta (1Y)1.28
52-Week Price Change+44.81%
50-Day Moving Average464.04
200-Day Moving Average410.20
Relative Strength Index (RSI)50.15
Average Volume (30 Days)4,883,808

Share Statistics

Shares Outstanding437.68M
Shares Change (YoY)-0.07%
Shares Change (QoQ)-0.35%
Owned by Insiders (%)1.36%
Owned by Institutions (%)83.52%

Income Statement (2023)

It brought in $32.74 billion in sales and made $4.53 billion in income in the past year. $10.02 was made per share.

Gross Profit12.93B
Operating Income6.01B
Pretax Income5.10B
Net Income4.53B
Earnings Per Share (EPS)$10.02

Balance Sheet

Cash & Cash Equivalents7.87B
Total Debt14.30B
Net Cash-6.43B
Net Cash Per Share-$14.70
Equity / Book Value22.11B
Book Value Per Share50.51
Working Capital2.44B

Cash Flow (2023)

Operating Cash Flow6.06B
Capital Expenditures-378.51M
Free Cash Flow5.68B
FCF Per Share$12.86
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John Smith is a veteran stock trader with over 10 years of experience in the financial markets. He is a widely followed market commentator known for his astute analysis and accurate predictions. John has authored multiple bestselling books explaining complex market concepts in simple terms for novice investors looking to grow their wealth through strategic trading and long-term investments.
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