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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 broaden its leisure suite. It has additionally pivoted into gaming not too long ago and has partnered with main trade veterans to convey top-class content material to the sphere.
However earlier than I get on to that, right here’s a contemporary have a look at the corporate’s This autumn 2023 earnings outcomes, launched final evening.
Earnings replace
Netflix’s earnings per share for This autumn this 12 months have been $2.11, somewhat under the consensus expectations of $2.20.
Nevertheless, the corporate reported a pleasant 12.5% enhance in income in opposition to the earlier 12 months’s quarter. It additionally added 13m subscribers.
Staggeringly, it additionally reported a web earnings of $938m, an enormous enhance 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 a part of present co-CEO Ted Sarandos within the place.
Based mostly on these earnings outcomes, I feel the corporate goes to have an excellent 12 months forward. It’s bought some good expansions underneath approach, and with the monetary progress to go along with it, it’s arduous 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 varied nations starting in January 2025.
The transfer signifies the corporate’s enlargement into reside broadcasting. A key a part of the deal is that Netflix will turn into the house for all WWE exhibits, specials, documentaries, authentic sequence, and upcoming initiatives.
Netflix can also be stepping 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; due to this fact, 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 trouble.
Valuation and different dangers
The present outcomes look promising. But, the market could have overvalued the inventory as a consequence. It has a price-to-earnings ratio based mostly on future estimates of round 32.
Subsequently, there may be little room for error within the agency’s outcomes to justify the present value.
Additionally, the corporate may face important points with its online game technique if extra established studios show extra common. Competitors within the trade is fierce, and avid gamers 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 progress 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.
Regardless that there are dangers in its new methods, and the valuation is a priority to cope with, the shares are a purchase to me. I’ll probably add it to my portfolio quickly when I’ve some spare money to speculate.