Netflix is down 21% this year. History tells us now is the time to buy.
At the time of this writing, netflix (NFL +4.77%) It’s down 21% year to date and 42% over the past year. It’s difficult to say the least. The mood was not good for a company that had spent years as one of the market’s favorite growth stories. But the last time investors gave up on these stocks, those who held on were rewarded.
Let’s go back to April 2022. Netflix reported its first subscriber decline in more than a decade, sending its stock price down 35% in one day. It lost more than $54 billion in market value overnight, marking its worst performance of the year. S&P 500It’s about 60% off. The narrative at the time was that streaming had peaked and Netflix was running out of room to grow.
Image source: Getty Images.
Next is the part worth studying. The company cracked down on password sharing, a move many thought would drive away customers. They’ve also launched cheaper, ad-supported plans.
Both bets paid off. By the end of 2023, Netflix had recorded record subscriber growth, and its stock price had risen more than 300% from its 2022 low. It turned out to be a bad call that led to the liquidation of the business in a panic.
today’s change
(4.77%)$3.54
current price
$77.73
Key data points
market capitalization
$327 billion
work range
$74.92 -$78.43
52 week range
$70.86 -$129.50
volume
2M
average volume
41.6M
gross profit
49.44%
What Netflix is Making Now
The current story rhymes with the last, and apart from the quarterly numbers, interesting work is happening again. Last June, Netflix partnered with French broadcaster TF1 Group to bring TF1’s live channels and on-demand library to the Netflix app. It’s the first time in the company’s history that it’s distributed a third-party linear channel, and signals its larger ambitions to become the front door to TV itself.
Real-time push passes through France. Netflix stacked its calendar with NFL games, including a regular season matchup in Australia and closed with the Westminster Kennel Club Dog Show. On the advertising side, the company is rolling out dynamic ad insertion for live programming and plans to introduce the ad tier to 15 new countries in 2027.
None of this eliminates risk. competitors walt disney Others are competitive, content spending is huge, and stocks that have fallen may remain cheap for longer than expected. However, bets on Netflix do not perform well during downturns. For patient investors willing to look beyond the price chart, the gap between falling stock prices and expanding business is the kind of setup worth taking another look at.
