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Learn the pros and cons of investing in Netflix, the popular streaming service that has since become a family favorite since its inception in 1997.
How to buy shares in Netflix
- Open a stock trading account - We recommend using Webull as it offers free stocks when you sign-up.
- Confirm your payment details - Add your payment method and fund your account.
- Research the stock - Search for the stock by name or ticker symbol - NFLX.
- Decide the amount of shares - Now it is time to decide how many shares you want to buy of Netflix.
- Purchase shares of NFLX - Buy the amount of shares you want with a market order or limit order.
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We all know and love the popular streaming service, Netflix, but should you trust your beloved streaming service enough to invest your money in it?
Do you feel confident in entrusting your hard-earned money in it? Like anything else, there are always pros and cons to investments, so let's dive into Netflix and try to help you understand why you should or shouldn't invest in this stock.
The tale that Reed started this company due to a late fee from a local video rental store turned out to be false. However, he did brainstorm the idea for a rental service that would mail its customers their videos instead to make it easier and more convenient.
What started as a simple conversation in the car with his buddy and co-worker Marc Randolph soon turned into a global sensation, sparking the attraction of television lovers worldwide.
Netflix delivers new, high-quality content to virtually any device that is compatible with applications, which in and of itself is impressive.
And despite the many recent competitors that have joined the streaming service game, Netflix is still the most popular streaming service worldwide, with over 225 million subscribers.
This subscription-based service piqued the interest of the younger generation. And, because they were able to negotiate contracts with other television networks to stream older shows (Star Trek, The Twilight Zone, Cheers, etc.), the older generations have learned to love all that Netflix has to offer, as well.
Being able to appeal to a large audience, and change and adapt to all of the recent challenges that tech-based companies have had thrown at them, makes Netflix a true phenomenon.
Should I Buy Netflix Stock?
There are many different factors to consider when determining whether or not you should invest your hard-earned money in a specific company, so it's essential to gather all relevant information before making a decision.
According to Forbes magazine, the answer, in most cases, is yes! Although Netflix hit a bit of a road bump in recent news, it continues to grow and adapt to change.
Historically, Netflix has maintained composure, even during low market trends. When considering investing, one of the most important things to look for in a company is how well it can bounce back from a rough patch.
Netflix bounced back once before and is, therefore, a good option for investment. Netflix also has a constantly changing service that creates new avenues for streaming.
This factor makes it relevant no matter what technological changes are happening in the current tech-based world
Netflix Stock Price Today
Now that you have a solid background in the company, let's take a look at why you should invest in Netflix. Netflix ranks among the top third when measuring income margin.
The company’s income margin, even in a low or "bad" quarter, was still at 20.3%. Netflix continues to hold on to its coveted number 1 spot as the most popular video streaming service worldwide, even after losing a whopping 200,000 subscribers this past quarter.
The company has a reputation for adapting to challenges and has yet to show any inkling of failure. Recurring business is their strong suit, with many subscribers acquired once and then becoming long-term paying customers afterward, which is a significant plus to the company's bottom line.
Netflix has good leadership and a strong team of leaders and board members. CEO Reed Hastings not only runs the company but is also the founder and has more than 20 years of experience in entrepreneurship and management.
Expanding operating margins make it easy for Netflix to control its bottom line. The subscription cost and subscriber growth are what drive the companies' margins.
Netflix also has the first-mover advantage, meaning that Netflix was the first company in the content streaming space, so naturally, it has the advantage.
Netflix can spend money on investment strategies to grow the business, while smaller companies lack the capital to do the same.
We covered the positive aspects of investing in Netflix. Now, conversely, let's take a peek at some downfalls the company may have that may sway your decision about whether or not you should invest in Netflix.
Since people were at home more in 2019 and 2020, Netflix gained a significant rise in the number of subscribers. Still, more and more people are turning to other forms of entertainment.
In addition, Netflix withdrew its service in Russia due to the recent war hardships, causing an even more significant loss in subscribers.
The company’s total income has fallen by 6.4% just in the last year. Although Netflix may be a good buy soon, according to the investing moguls at Investors Business Daily, now may not be an ideal time to purchase this stock.
Although Netflix is widely popular and successful in the United States market, it still seems to struggle with providing good entertainment content for countries outside the United States.
You can never be too careful when talking about investing your hard-earned money, so taking the time to examine each stock thoroughly before deciding to invest in it is crucial.
Should you invest in Netflix? That depends on how confident you feel in deciding to invest in it. If you're looking to invest in a company long-term, experts recommend Netflix as a viable option.
If you are new to investing and want something a bit safer and more short-term, then Netflix may not be your best option at this current point in time.
But, again, it’s a timing game when to buy and sell. Nobody knows what stocks will become the next big success story, but that's the beauty of investing!
Should you invest $1,000 in Netflix right now?
Before you consider the Netflix, you'll want to hear this.
An award-winning analyst team just revealed what they believe are the 10 best stocks for investors to buy right now... and the Netflix wasn't on the list.
The online investing service they've run for nearly two decades, Motley Fool Stock Advisor, has beaten the stock market by over 4X.* And right now, they think there are 10 stocks that are better buys.