|ISIN: US64110L1061|SECTOR: Consumer Discretionary
Netflix is a global streaming entertainment service that charges a reasonable, no-obligation monthly subscription for the unlimited viewing of movies, TV shows, and games on any screen with an internet connection. Rather than being a do-all brand, Netflix is a brand with a narrow passion, Not 7-Eleven, not Starbucks, United, not Southwest, HBO, not Dish.
They are not just another “video” company that plays videos of everything—news, user-generated content, live sports, and music videos. They are an entertainment service for movies, TV shows, and video games.
Their presence relieves the complexity and frustration that characterize the majority of MVPD dealings with their clients. They try very hard to be really clear. Their hassle-free online cancellation is the best illustration of this. Participants are free to leave at any time and return whenever they like.
With the exception of China and Russia, Netflix is accessible almost everywhere. As they continue to improve their service, their international development will take several years to manifest. They began by focusing mostly on wealthy, outward-looking customers with international credit cards and smartphones in the more than 130 new regions they introduced in 2016.
Similar to how they’ve approached every market they’ve entered, their strategy is to pay attention, pick up on things quickly, and enhance over time by offering subscribers a better Netflix experience, more languages, and more content.
They are cognizant of the varying levels of awareness of Netflix in these new areas, as well as the cultural and content preferences that exist globally. In other nations, there are issues with the payment and broadband infrastructure as well.
FINANCIAL INFORMATION
| INR MILLIONS | FY23 | FY22 |
| Total Assets | 48731.99 | 48594.77 |
| EBIT | 6205.4 | 5263.93 |
| Profit after tax | 5407.99 | 4491.92 |
| Total Revenue | 33723.3 | 31615.55 |
Source: Company financial Report
For the fourth quarter and the year ending December 31, 2023, Netflix, Inc. released its earnings reports. The business posted sales of USD 8,832.83 million for the fourth quarter, up from USD 7,852.05 million in the same period last year. Compared to USD 55.28 million a year earlier, net income was USD 937.84 million.
From ongoing activities, basic earnings per share were USD 2.15 as opposed to USD 0.12 in the previous year. From ongoing activities, diluted earnings per share were USD 2.11 as opposed to USD 0.12 in the previous year.Sales for the entire year were USD 33,723.3 million, up from USD 31,615.55 million in the previous year. Compared to USD 4,491.92 million a year earlier, net income was USD 5,407.99 million.
| Price to Book Value | 12.85 |
| Dividend Yield (%) | 0.00% |
| Return on Assets (ROA) | 7.61% |
| Return on capital (%) | 9.79% |
| Earning Per Share | $12.03 |
Source: Company financial Report
SHAREHOLDING PATTERN
Source: Company financial Report
| Majority shareholders | Other DIIs |
| Pledged Promoters Holdings | None |
| Mutual Fund | Held in 12 Schemes (0.14%) |
| FIIs | None |
| Promoters with Highest Holdings | None |
| Highest Public /Private Shareholder | The Vanguard Group and BlackRock |
| Individual Investors holdings | 32.80% |
Source: Company financial Report
SHAREHOLDING COMPARE (% Holding)
| Majority shareholders | 0% | 0% | 0% |
| FIIs | 0% | 0% | 0% |
| Mutual Fund | 0.50% | 0.40% | 0.10% |
| Insurance Companies | 7.6% | 4.6% | 3% |
| Non institutional Investors | 34% | 3.70% | 30.30% |
| Others | 0% | 0% | 0% |
| Other DIIs | 61.26% | 59.58% | 1.68% |
Source: Company financial Report
COMPARE VALUATIONS WITH PEERS
| Company | PE | EV/EBIDTA | ROE (%) |
| Netflix | 40.00 | 10.40 | 26.15 |
| Walt Disney Company (The) (DIS) | 63.11 | 11.87 | 2.42 |
| Electronic Arts (EA) | 41.15 | 15.37 | 10.75 |
| Live Nation Entertainment (LYV) | 38.77 | 13.61 | -292.83 |
| Zoom Video Communications Inc. Class A (ZM) | 32.28 | -14.55 | 1.73 |
Source: Company financial Report
Netflix has attracted others to emulate its success as its revenue and subscriber base have increased. In an attempt to compete with Netflix for online viewers, Amazon heavily invested in the debut of its Prime Video subscription service at the same time.
A number of American cable services, including HBO Max, Peacock, and Paramount, debuted their own streaming services in 2020. Disney also debuted its own streaming service in November 2019. Due to this, Netflix’s growth has been hampered; the first subscriber drops in the North American market occurred in 2022.
In response, Netflix introduced a more affordable ad-supported plan to draw in customers who otherwise wouldn’t pay for the service. With subscription growth slowing down, it also views the ad-supported tier as a means of securing a fresh revenue stream.
Netflix has seen rises in revenue and user growth following the 2022 dip, indicating that this has worked effectively for them. As other operators struggle to turn a profit from their streaming service, it is now perceived as being in the driver’s seat in the streaming battles.
The current market’s expanding desire for over-the-top (OTT) services may help Netflix achieve even greater development and success because of its strong reputation in the sector.
Because users are joining up for the exclusive Netflix-only content, Netflix is able to add more services to its platform, including gaming, comedy, comics, and more.
The company can choose to create original concepts that are better than what the current OTT Channels have to offer. Previously rejecting the traditional advertising-based economic strategy, Netflix has been able to concentrate on offering first-rate customer care.
PRICE ACTION
| Parameters | Range |
| Volume Traded | 4,786,353 |
| Current Price | $613.01 |
| Earnings Per Share(EPS) | $14.01 |
| Previous Value | $613.01 |
| Open Price | $615.00 |
| Today low/high | $611/$616 |
| 52 week low/high | $293.54/$624.42 |
Source: New York Stock Exchange
Netflix was one of the very few firms with stable stock prices in 2016 after a downturn in market attitude against digital companies. This demonstrates the trust that investors have in Netflix’s revenue model. Over its existence, Netflix has consistently stayed ahead of consumer trends.
Its choices to launch streaming video, give an unlimited movie subscription plan, acquire an online film library, and eventually carve out a niche for itself through the creation of original content have all helped to position the company in a dominant position.
Netflix has been able to make more informed judgments about content production and marketing strategies by using data analytics to uncover new insights about the preferences and aversions of its audience.
Netflix’s digital transformation has been significantly aided by data analytics, which has given them a competitive advantage over other companies.
This is demonstrated by the fact that Netflix leverages cutting-edge data analytics methods to acquire a deeper understanding of user behavior, including sentiment analysis, consumer segmentation, predictive modeling, and natural language processing.
Improved comprehension of their clientele has allowed them to tailor suggestions and tailor content to individual customer groups.
Source: New York Stock Exchange
We will examine the trend, momentum, volatility, and volume indicators in our technical analysis of NFLX’s data from the previous five days to give you a thorough picture of potential stock price movement in the days ahead.
Moving Averages (MA): There appears to be a very consistent short-term trend, as the 5-day MA has been bouncing between $606 and $607.
MACD: A bearish trend in the stock price is indicated by the negative Moving Average Convergence Divergence (MACD).
EMA: The Exponential Moving Average (EMA) has been rising over time, suggesting a possible longer-term positive outlook.
The Relative Strength Index (RSI) has been hovering between 60 and 70, indicating a neutral momentum in the stock without any extreme overbought or oversold conditions.
The Stochastic Oscillator shows both %K and %D lines declining, signaling a weakening momentum in the stock price.The Williams %R indicator has been fluctuating around -30 to -40, suggesting a neutral to slightly bearish momentum.
In summary, the RSI reflects neutrality, while the Stochastic Oscillator and Williams %R indicate weakening and slightly bearish momentum respectively. This suggests a cautious approach for traders or investors.
