3 Good Reasons to Buy Netflix Shares: Check out our tips!
2020 is undoubtedly a very particular and difficult year for investors inequities, but to weigh it well there is a category of shareholders who have not complained at all about the riots that have occurred. They are the shareholders of Netflix (NYSE: NFLX) the global premium streaming giant that, after a first decline recorded at the outbreak of the coronavirus, has been able to stand up with its head held high, continuing to establish itself on the market with its winning model.
Last year Netflix was in tribulation for the release of Disney’s (NYSE: DIS) brand new platform, Disney +. In fact, the day immediately following the Netflix stock crashed.
The cheaper subscriptions of other services have discouraged analysts who have long been asking the company to raise prices have made the stock lose points, suggesting that its monopoly was about to collapse.
In reality, all this has not had profound repercussions on the company, in fact it has been able to get up in a short time and once again confirm itself as the reference point for online streaming, especially in the period of COVID-19.
So what are Netflix’s strengths? and why would it be worth buying its shares? Let’s see it right away in this guide in which we give you 3 very valid reasons why Netflix is destined to occupy an important place in its market.
1. Good news on first-quarter earnings
Netflix will release financial results after the market closes on Tuesday and investors are eager to await the outcome. Prior to last year, the company has done very well by staying profitable on virtually all quarterly updates. But then things changed.
Following last spring’s price hike, the second and third quarters were not positive and the fourth fared even worse as it lost the national lead with the release of Disney + last November.
However, Netflix has proven from the beginning a company with a strong conservative spirit with very clear and precise objectives. Therefore, it is really hard to believe that its strength and credibility will vanish with such ease and analysts think so too. This is an encouraging sign!
2. Quarantine is the perfect time for Netflix
The lockdown is certainly the perfect testing ground for Netflix as users, spending many hours at home, decide to subscribe to online streaming services. Despite the contact bans imposed by the forced quarantine and the difficulty in shooting new series, the production of Netflix makes it known that the new services will not stop.
Successful films such as Tiger King have given new impetus to the activity of the company which has already thought of very important news for the near future. This will certainly allow it to stay on the market and occupy a prominent position in the coming years.
3. Roku and Netflix share the same fate
Roku (NASDAQ: ROKU) is a company that designs and manufactures digital media players that allow access to streaming media. Its first model dates back to May 2008 in collaboration with Netflix.
Shares in this company were up 10% after the company released first-quarter results this year. Users using these devices have increased by 37% in the last year while there has been an increase of nearly 50% more customers than in the same quarter last year.
The fates of the two companies seem to be united by a strong bond: on the one hand, there is the production of unstoppable success content by Netflix, on the other the technological need of users to find devices capable of allowing even better use of the contents.
Conclusions: is it worth buying Netflix shares?
The answer tends to be yes, as the company has proven to be solid and with clear and precise long-term objectives. Furthermore, it has shown that it does not suffer major damage from the competition by focusing on quality content highly appreciated by the public who continue to prefer it to other entertainment platforms.