December 7, 2021

Beyond Going Long

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Gamer, gamer everywhere

Netflix has not only lived up to expectations, but is actively working towards more growth

Although the Netflix streaming service has grown into a big-name competition in recent years, this has not been shown at all in the market unit results. On the contrary, it exceeds expectations in many ways. When Netflix released its third-quarter earnings report on October 19, 4.4 million new members drew particular attention, bringing the total number of subscribers worldwide to 213 million.

Higher earnings per share and other growth expectations

And the company achieved revenues of $ 7.48 billion for the third quarter of this year, in line with expectations. However, earnings per share (EPS) were 24 percent better than the company had expected. It came in at $3.19, compared to estimates of $2.57 per share. Netflix is ​​not satisfied with the 4.4 million subscriber increase in the third quarter and expects a nearly double increase at the end of the year (+8.4 million).

Perhaps the reason why Netflix is ​​so good is that it spent $38.7 billion on content in 2018-2020. The company’s budget for this year is about 17 billion dollars. According to the company’s management, it could rise in the future. Netflix is ​​also active in marketing. For example, it recently announced the launch of a new line of games based on the popular Squid Game series in collaboration with Walmart.

future prospects

Just before Christmas shopping, the US chain Walmart launched the “Netflix at Walmart” digital store, where people can buy products in different categories, such as music, clothing, games and games related to Netflix. The site started selling products related to popular series such as Stranger Things, The Witcher, Nailed it, and CoComelon. With this strategy, Netflix is ​​expanding its business and making the company more stable in the future.

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CEO Reed Hastings confirmed during the second quarter of June that the company would enter the gaming business, but with the goal of “improving services” rather than increasing short-term profits.

international markets

Netflix has many opportunities in international markets. In India, for example, huge sums are invested in local language content. The company also released a low-cost, mobile-only plan in 78 countries in Southeast Asia and sub-Saharan Africa in the second quarter. The logic is that as development and revenue grow, members can gradually move to higher priced subscriptions.

Expectations are high

Forty analysts interviewed by agreed on the average stock price development over the next 12 months that the price could reach $705. The highest estimate was $800, and the lowest was $342. In any case, based on Netflix’s results and activities, the company appears determined to continue to “roll out the competition” and increase its value.