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Is Netflix Stock Still a Buy After Record-Breaking Gains?

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Written by Ellis Hobbs Reviewed by Jack Kellogg Fact-checked by Tim Sykes
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Amid renewed investor confidence, fueled by strategic expansion into major international markets and impressive subscriber growth, NETFLIX INC’s market outlook brightens considerably. On Wednesday, NETFLIX INC’s stocks have been trading up by 10.12 percent.

Recent Market Movements:

  • Netflix’s stock price soared by 10% to $953.13 after reporting higher-than-expected earnings, highlighting a significant market response.

Candlestick Chart

Live Update At 14:32:06 EST: On Wednesday, January 22, 2025 NETFLIX INC stock [NASDAQ: NFLX] is trending up by 10.12%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • The company added an impressive 18.91M new subscribers, marking its strongest quarterly net addition in history, reflecting aggressive growth potential.

  • Analysts at Macquarie raised Netflix’s price target to $965, citing continued subscriber growth fueled by popular content like “Squid Game 2” and live events.

  • TD Cowen maintained a ‘Buy’ rating for Netflix, increasing its price target from $835 to $1,000 amidst optimism about its subscription and ad-tier expansion.

  • Piper Sandler hailed Netflix as the leader in streaming, boosting the price target to $950 due to positive expectations for content-driven subscription growth.

Netflix’s Earnings Overview:

In the world of trading, it’s essential to stay vigilant and responsive to rapidly changing conditions. As millionaire penny stock trader and teacher Tim Sykes says, “You must adapt to the market; the market will not adapt to you.” This principle is crucial for traders who want to succeed. By being flexible and ready to change strategies when necessary, traders can navigate the complexities of the market more effectively. Lack of adaptation can lead to missed opportunities and potential losses. Therefore, understanding and applying this mindset can immensely contribute to a trader’s success.

In its latest report, Netflix shattered expectations by recording stellar quarterly performance numbers. Revenue climbed to $10.25B while earnings per share shot up to $4.27 from $2.11. This leap showcases the successful strategizing and adaptation to market trends. The uptick in new subscribers to 18.91M further underscores Netflix’s growing dominance in the streaming space.

Key ratios tell an intriguing story. With a gross margin at 45.3% and an operating margin gearing towards 30% by 2027, the trajectory paints a promising picture. The enterprise value at a hefty $383.81B signals Netflix’s significant market presence, while a P/E ratio standing at 48.51 reflects potential room for growth.

More Breaking News

Looking further into financials, Netflix’s leverage and quick ratios indicate sound financial health. The balance sheet exhibits strong assets and limited long-term debt compared to equity, positioning the company advantageously for future expansions or strategic shifts.

Impactful News and Market Implications:

The recent buzz paints vivid narratives of Netflix’s ascent. Analysts are increasing price targets, drawing attention to strategic initiatives—be it enhancing live-streaming content or diversifying income streams. Securing streaming rights to popular sports events and content like “Squid Game 2” reinforce Netflix’s strategy to captivate varied audiences.

Further adding momentum, Wall Street firms like Goldman Sachs have pointed to Netflix’s escalating subscriber count and ad business growth as key drivers. Though debates of potential bubbles linger, strong fundamentals offer convincing rebuttal to skeptics. The stock’s recent bullish behavior, amid volatile sectors, suggests it’s more than just speculative hype.

Deeper Conclusions:

Let’s venture into conjectures. Could this surge be a precursor to sustainable growth? Examining subscriber traction and innovative content strategies, the responses generally swing towards optimism. Yet, prudent traders might gauge risks, considering market saturation complexities and competitive pressures.

Netflix’s comprehensive scaling outlines an adaptive, dynamic business model primed for ongoing value creation. If subscriber numbers continue their upward trend and operational margins improve, Netflix’s present price could be a stepping stone rather than a ceiling.

To summarize, Netflix’s recent performance has reignited trader interest with solid earnings reports and strategic content plays. As market analysts raise price targets, citing cumulative strengths and promising future pathways, the key question remains: Is Netflix’s valuation currently optimal, or is the real growth yet to come? As millionaire penny stock trader and teacher Tim Sykes, says, “There is always another play around the corner; don’t chase just because you feel FOMO.” This wise trading advice serves as a reminder to remain discerning and patient amidst the excitement.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”