Could Netflix Stock Help You Become a Millionaire?

2 months ago 19

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Neil Patel, The Motley Fool

Mon, Apr 7, 2025, 4:15 AM 4 min read

Netflix (NASDAQ: NFLX) has been 1 of the champion performing stocks this century. Shares person skyrocketed 59,900% successful the past 2 decades (as of April 3). Early investors who held connected done the ups and downs person been richly rewarded, with immoderate apt accumulating monolithic amounts of wealth.

This streaming stock presently trades 12% disconnected its peak. And the institution carries a marketplace capitalization of $390 billion. But if you bought Netflix today, could you go a millionaire?

Netflix deserves recognition for wholly disrupting the media industry. The absorption squad was convinced successful the aboriginal days that the net was going to fundamentally alteration however radical consumed video entertainment. By letting viewers prime from a immense catalog of shows and movies, with the quality to ticker whenever they wanted, Netflix provided a superior acquisition compared to accepted cablegram TV.

Growth implicit the years has been stellar. Netflix reported $39 cardinal successful gross successful 2024, which was up a whopping 609% from 2014. The subscriber number present stands astatine 302 million, arsenic the institution rapidly brought connected caller customers, propelling the cord-cutting trend.

Even successful caller years, Netflix has recovered caller ways to grow. Executives cracked down connected password sharing to amended monetize radical who were utilizing others' accounts. The concern introduced a cheaper, ad-supported tier -- a strategical pivot that was antecedently believed would ne'er happen. It has proven to beryllium highly successful, registering 30% quarter-over-quarter rank maturation successful the 4th quarter.

Looking ahead, Netflix inactive has imaginable to expand. "We're little than 50% penetrated into connected households," CFO Spence Neumann said connected the Q4 2024 net call. Of course, these non-members volition beryllium harder to convince; otherwise, they would person already signed up for a Netflix account.

As the institution is gradually approaching a saturation constituent present successful the U.S., maturation volition mostly travel from overseas markets that person little pricing power. This volition astir apt effect successful gross expanding astatine a slower pace.

Other streaming services are struggling with profitability. Here's wherever Netflix bucks the trend. Operating income surged 300% conscionable successful the past 5 years. And the enactment squad expects to study a superb operating borderline of 29% successful 2025, with escaped currency travel projected astatine $8 cardinal this year.

Netflix is simply a precise profitable company. That's due to the fact that it has reached monolithic standard that allows it to walk sizable sums connected contented ($18 cardinal planned for this year) that it's capable to dispersed retired implicit a immense subscriber number and gross basal ($44 cardinal forecast for this year). It's tenable to expect gross maturation to outpace cash-content costs looking ahead.