Picture supply: Getty Photographs
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 develop its leisure suite. It has additionally pivoted into gaming just lately and has partnered with main business veterans to carry top-class content material to the sphere.
However earlier than I get on to that, right here’s a contemporary take a look at the corporate’s This fall 2023 earnings outcomes, launched final night time.
Earnings replace
Netflix’s earnings per share for This fall this yr had been $2.11, somewhat beneath the consensus expectations of $2.20.
Nevertheless, the corporate reported a pleasant 12.5% improve in income towards the earlier yr’s quarter. It additionally added 13m subscribers.
Staggeringly, it additionally reported a internet earnings of $938m, an enormous improve from $55m a yr in the past.
Co-founder and co-CEO Reed Hastings additionally stepped down from his position. He’ll now function Netflix’s government chairman. To exchange him, COO Greg Peters will be part of present co-CEO Ted Sarandos within the place.
Based mostly on these earnings outcomes, I feel the corporate goes to have an awesome yr forward. It’s received some good expansions beneath approach, and with the monetary development to go along with it, it’s laborious to complain.
A more in-depth take a look at WWE and gaming
The corporate reached an settlement to stream WWE’s weekly TV present, Uncooked, dwell throughout numerous international locations starting in January 2025.
The transfer signifies the corporate’s growth into dwell broadcasting. A key a part of the deal is that Netflix will turn out to be the house for all WWE reveals, specials, documentaries, unique collection, and upcoming tasks.
Netflix can 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 government from Meta‘s Oculus and EA.
Lower than 1% of Netflix subscribers frequently interact 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 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 value.
Additionally, the corporate might face vital points with its online game technique if extra established studios show extra in style. Competitors within the business is fierce, and players are sometimes loyal to particular studios’ work. Breaking into the superior video games market isn’t any imply feat.
Takeaway
General, Netflix is on a bull run for my part. The agency is anticipating double-digit development for the total yr 2024.
I used to be apprehensive of the inventory a few weeks in the past, however much less so after the current 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 seemingly add it to my portfolio quickly when I’ve some spare money to take a position.
