TMGM

How to Start Investing in Netflix

Investing in large corporations and their stocks is common in the trading world. These big companies also have large market capitalization, which signifies that it is generally safer to invest in their stocks. As the largest streaming platform, Netflix is a prime investment option. Investors can buy shares directly or use a contract for differences (CFDs) to speculate on price movement. Share prices have risen recently, so is this a good time to invest in Netflix?

QUICK LINK TO CONTENT

1. How Forex Trading Works with TMGM

2. How Profit is Calculated:

3. Opening the Position

4. Closing the Position

5. Why Trade Forex with TMGM?

6. Transparent Spreads

7. Major Currency Pairs

8. Explore more about Forex with TMGM

Netflix’s Stock Market Evolution

Founded in 1997, Netflix initially started with DVD rentals, but it was a competitive industry as most people weren’t familiar with consuming online content.

After some financial difficulties and proposal rejections, Netflix went public under the stock exchange symbol NFLX in 2002 to increase market liquidity. Netflix stock prices steadily climbed until October 2021 (US$678) but tanked to US$182 in June 2022. Despite these hardships, Netflix’s stock prices reached a record-breaking high of 911.06 USD in December 2024.

This brings forth the question: is now a good time to invest in Netflix?

How to Invest in Netflix?

The two ways to purchase Netflix stocks are through cash or CFDs. For CFDs, there are two methods:

CFD trading on Netflix allows traders to profit from rising and falling stock prices. If traders can predict a price drop, they can go short and potentially make a profit.
Purchase Netflix stocks directly.

Netflix Stock Performance So Far

Netflix's stock performance has been quite volatile in the past. Returns were 11% in 2021, 51% in 2022, and 65% in 2023. However, Netflix’s stock prices for 2024 have been on the rise, and these recent soaring prices could be attributed to subscriber growth and password-sharing restrictions. Their stocks have risen by almost 72% in year-to-date trading. In comparison, their rival streaming service, Disney+, only gained 5% over the same period.

From January 2023 to September 2024, Netflix added over 50 million subscribers. The company’s revenue is also projected to grow by around 15% to almost $39 billion.

Dividends Paid Out by Netflix Per Share

Unfortunately, Netflix shareholders do not receive dividends. Netflix’s initial decision was justifiable as the company was in the early stages of development back in 2010. Despite its current rise in stock market prices, Netflix still has no plans to issue dividends or increase leverage to purchase back stock. Netflix CFO Spencer Neuman states that the company wants to prioritize “profitable growth by reinvesting in our business”.

Technical Analysis

If you’re looking to invest in Netflix, you should stay updated on its upcoming earnings disclosure for 2024. The company is expected to report an EPS of $4.20, a 99% rise from last year's same quarter. Experts view Netflix's positive estimate revisions as a good indicator of its business outlook.

Netflix shares have entered a bullish trend due to the company’s positive end-of-year result estimates. Thus, this has created an excellent opportunity for traders looking to invest. The company is also expected to continue its streak of subscriber additions, which will likely grow revenues.

Traders can invest in Netflix shares long-term, assuming stock prices will continue climbing or trading CFDs and taking advantage of price fluctuations. Before purchasing the stock, however, traders must fully comprehend the ins and outs of the company to make informed decisions.