Is Netflix Stock a Buy After October Rally?
From being just a DVD rental and media rental service, Netflix has come a long way since its inception in 1998. In 2019, the streaming giant Netflix, Inc. (NASDAQ: NFLX) was the world’s leading internet entertainment service, with over 167 million paid subscribers who had access to thousands of movies and series. The company’s mission is to bring enjoyment to people from all over the world with their personal and online streaming services, and they have been successful in doing so.
In October of 2020, Netflix’s share prices experienced a surge, up almost 40% since the beginning of the month. This positive trend in the stock price has sparked a debate among analysts, investors and financial experts, who are asking whether this means that the stock is a “buy” or not.
In this article, we will analyze the factors that are influencing the recent increase in Netflix’s stock prices and assess whether it is a good stock to buy.
Netflix October Rally
Netflix’s stock price went through the roof in October. After having dropped to $441 in late September, the stock of NFLX recovered to $600 by mid-October. This impressive rise in the stock price can be attributed to the stunning success of their new movie “The Irishman” and an increase in the company’s share buyback plan from $2 billion to $5 billion. Additionally, analysts have also noted that the stock market is currently in a period of heightened market volatility, which is likely having a positive influence on Netflix’s stock prices.
Netflix Financial Performance
Netflix is one of the world’s leading streaming services with more than 167 million paid subscribers. This is a clear indicator of the strong financial performance of the company, which is a major factor in driving their stock prices in the present market.
In their most recent quarterly earnings report, Netflix reported a revenue of $5.2 billion. This was up 24.9% year-on-year and beat analysts’ expectations. In addition, global streaming paid memberships also grew to 167 million paid subscriptions in the quarter. This number was up 26.2% year-on-year and was driven by new pricing plans and original content.
Analysts’ Opinion on Netflix Stock
Analysts have given an overwhelmingly positive response to Netflix’s stock. According to data from CNBC, more than 77% of analysts recommend buying Netflix’s stock. Additionally, the company has also been placed in the Overweight list by analysts, suggesting that the stock is a good buy.
Investors’ Reaction
The latest increase in Netflix’s share prices has been welcomed by investors. In the stock market, investors have shown strong interest in the stock and the company’s share buyback plan. Investors view this plan as a sign that the company is confident in its financial performance and is also looking to increase shareholder value.
The October rally in Netflix’s stock prices is a sign of the strong performance of the company and its attractive share buyback plan. At the same time, analysts and investors are overwhelmingly in favor of buying Netflix’s stock. Adding all of these factors together, it is safe to say that investing in Netflix’s stock is a good option at the current moment.