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There’s some large information surrounding Netflix (NYSE:NFLX) inventory, together with its acquisition of main WWE rights, a part of its ongoing plan to increase its leisure suite. It has additionally pivoted into gaming lately and has partnered with main trade veterans to deliver top-class content material to the sector.
However earlier than I get on to that, right here’s a recent have a look at the corporate’s This fall 2023 earnings outcomes, launched final evening.
Earnings replace
Netflix’s earnings per share for This fall this 12 months have been $2.11, a bit of beneath the consensus expectations of $2.20.
Nevertheless, the corporate reported a pleasant 12.5% improve in income in opposition to the earlier 12 months’s quarter. It additionally added 13m subscribers.
Staggeringly, it additionally reported a internet revenue of $938m, a large improve from $55m a 12 months in the past.
Co-founder and co-CEO Reed Hastings additionally stepped down from his function. He’ll now function Netflix’s govt chairman. To interchange him, COO Greg Peters will be part of present co-CEO Ted Sarandos within the place.
Based mostly on these earnings outcomes, I believe the corporate goes to have an important 12 months forward. It’s bought some good expansions beneath means, and with the monetary development to go along with it, it’s onerous to complain.
A better have a look at WWE and gaming
The corporate reached an settlement to stream WWE’s weekly TV present, Uncooked, reside throughout numerous international locations starting in January 2025.
The transfer signifies the corporate’s growth into reside broadcasting. A key a part of the deal is that Netflix will change into the house for all WWE reveals, specials, documentaries, unique sequence, and upcoming tasks.
Netflix can also be moving into gaming. It began its video-game operations with interactive content material on its streaming platform. Now, it has employed the likes of Mike Verdu, a former govt from Meta‘s Oculus and EA.
Lower than 1% of Netflix subscribers commonly have interaction with its video games as of August; subsequently, the corporate is making an attempt to develop this. It has acquired a number of gaming studios and opened its personal in Helsinki and California to bolster the hassle.
Valuation and different dangers
The present outcomes look promising. But, the market might have overvalued the inventory as a consequence. It has a price-to-earnings ratio based mostly on future estimates of round 32.
Due to this fact, there’s little room for error within the agency’s outcomes to justify the present worth.
Additionally, the corporate might face vital points with its online game technique if extra established studios show extra common. Competitors within the trade is fierce, and players are sometimes loyal to particular studios’ work. Breaking into the superior video games market is not any imply feat.
Takeaway
Total, Netflix is on a bull run for my part. The agency is anticipating double-digit development for the complete 12 months 2024.
I used to be apprehensive of the inventory a few weeks in the past, however much less so after the latest information and earnings.
Though there are dangers in its new methods, and the valuation is a priority to take care of, the shares are a purchase to me. I’ll possible add it to my portfolio quickly when I’ve some spare money to speculate.
