With investors obsessed with Nvidia (NVDA) and the Magnificent 7, they may have forgotten about their former favorite — FAANG (a refresher on FAANG) component Netflix (NFLX).
Not everyone has forgotten about the streaming beast: the stock is up 23% since its fourth quarter earnings report!
I liked a couple of the call outs from JP Morgan analyst Doug Anmuth in a new note this morning.
First was his reasoning behind staying bullish on Netflix shares.
“We remain positive on Netflix shares and our bull thesis remains: 1) accelerating revenue growth in 2024 led by healthy organic growth, paid sharing, and price increases; 2) steady operating margin expansion balanced with growth investments across content, advertising, and gaming; 3) multi-year free cash flow ramp on improving profit and cash content discipline; 4) Netflix’s strong streaming leadership position; and 5) potential to become global TV as Netflix expands its 260 million member base across the 500 million plus global CTV households ex-Russia & China. We believe Netflix’s large scale, strong engagement (around 2 hours/day), and diversified content will continue to push the platform toward becoming global TV over time — i.e., the default choice for where users will consume long-form video content.”
And then his brief analysis on the upcoming Mike Tyson vs. Jake Paul fight on Netflix:
“Netflix continues to build out its sports content, primarily targeting sports entertainment and shoulder programming. Key examples include WWE Raw, Formula 1: Drive to Survive, Full Swing, Break Point, Quarterback, Tour de France: Unchained, The Netflix Slam, etc. Importantly, Netflix is partnering with Most Valuable Promotions (MVP) to stream its third live sports event ever, a heavyweight boxing mega-event headlined by Jake Paul and Mike Tyson on July 20. We believe the fight could be the most watched boxing match ever given ease of access and NFLX’s large global subscriber base, and it should attract meaningful ad dollars while also boosting a seasonally slower period in mid-summer. While Netflix’s current focus is sports entertainment and shoulder content, we do not rule out a bigger push into live sports over time.”
