What to look out for when investing in this streaming giant.
Since revolutionizing the way we watch and talk about TV, Netflix has branched out into production and content curation. With over 90 million subscribers, Netflix is the most popular streaming service in the world, making it an equally popular investment choice.
Netflix’s recent stock performance
Monitoring market performance is just one aspect of the research you should do before investing in a company like Netflix. Take a look at Netflix’s stock price performance over the last several months and keep in mind that past performance is no indication of future results.
Netflix’s technical performance
There are several ways to analyze market trends. Here’s a summary of what some key technical indicators are saying about Netflix’s current stock trend, according to charting service TradingView.
Netflix’s financial performance
See how Netflix has performed financially over the last three years.
|Netflix financial reporting figures||Revenue||Operating income||Net income||Total assets||Total equity|
|2015||$6.77 billion||$305 million||$122 million||$10.20 billion||$2.22 billion|
|2016||$8.83 billion||$380 million||$187 million||$13.6 billion||$2.7 billion|
|2017||$11.692 billion||$839 million||$559 million||$19.013 billion||$3.582 billion|
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Ways to stay up to date with Netflix stock
When buying or selling shares in any company, keep an eye on its current affairs. A few things to periodically check in on include:
- Financial reporting. Knowing when Netflix will be releasing its financial reports will let you know how the company’s performing and will have a big impact on the share price. Netflix reports on December 31st each year.
- Company news. Is Netflix hiring and/or firing staff? Are they still creating new content? Events such as these will have an impact on their stock price.
- Wider news. Be aware of other external events and news that may have an impact on Netflix stocks. For example, trends in overall use of streaming sites.
- Does the company pay dividends? If a company pays dividends, it means they pay some of their profits back to shareholders. Currently, Netflix does pay dividends on their shares.
- Shareholder meetings. These are often held annually and invite large shareholders to attend meetings and vote on matters relating to the company. Keep tabs on when these are — they may provide insights into the future direction of the company.
Things to consider before investing
A few questions you should research before investing in a company:
- What does the company do? Can you explain what the company does in a few sentences and, more specifically, how it makes money? If not, look into it before investing.
- Is it making profits? If you’re not sure whether or not a company is profitable, this could be a warning sign. Read Netflix’s quarterly or annual earnings reports and take a look at the figures for yourself.
- Who are the main competitors? Before you invest, you need to know if the company is the market leader, a newcomer, a fast-growing disrupter or on a downward trajectory. If the company you’re considering investing in operates globally, consider looking into their competitors in other countries.
- Who runs the company? Research who the CEO, CFO and senior managers are. Also, look out for constantly changing leadership, which suggests instability.
- Is the company’s position sustainable? If you’re looking for a long-term investment, find out whether or not the service the company provides will still be in demand several years from now. If you’re looking for a short-term gain, perhaps this is less important.
- Is there room for future growth? What’s the outlook for medium- to long-term growth? Has the company reached its maximum size?
Netflix is a popular choice for investors who aren’t willing to gamble their money on a smaller startup. However, any stock purchase is a risk, so do your research and decide if Netflix is a company you’re willing to bet on before you buy or sell any of its shares.
Frequently asked questions
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