3 Reasons to Invest in Netflix (NFLX)

Netflix’s stock price has been on a bit of a rollercoaster lately, dropping by 22.7% in the past six months to $92.68 per share. Some of this decline was due to softer quarterly results, which has some investors wondering if now is a good time to jump in and buy Netflix (NFLX) stock. Want to know more about what’s going on with NFLX? Check out our full research report for all the details.

There are a few key reasons why we remain optimistic about Netflix. Founded by Reed Hastings, Netflix started off as a DVD mail rental service before making a groundbreaking shift to streaming in 2007, paving the way for the streaming content revolution.

One of the reasons we’re fans of Netflix is the impressive increase in global streaming paid memberships. This metric, crucial for the company’s performance, has been growing at a rate of 15.7% annually over the past two years. This rapid growth indicates that Netflix’s content offerings are resonating with consumers around the world.

Another factor that impresses us is Netflix’s EBITDA margin, which reflects the company’s operational efficiency. With an average EBITDA margin of 29.8% over the last two years, Netflix has shown itself to be a well-run organization in the competitive world of consumer internet companies.

Lastly, Netflix’s increasing free cash flow margin is a positive sign for its financial health. Cash flow is key in the long run, and Netflix has managed to expand its free cash flow margin by 15.8 percentage points in recent years, reaching 20.9% for the trailing 12 months. This indicates that Netflix is becoming less capital-intensive and more profitable over time.

In conclusion, despite the recent challenges in its stock price, we believe that Netflix remains a solid investment. With the stock trading at 23.9x forward EV/EBITDA, now might be a good time to consider adding Netflix to your portfolio. To learn more, dive into our comprehensive research report – it’s completely free for you to access.

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