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Netflix Stock trend

Netflix is one of the most successful streaming services, which allows you to watch a wide variety of movies and T.V. shows. Netflix’s huge growth would stop a long time ago if the CEO Reed Hastings, had to choose to operate in the U.S. market only. Now, more than half of Netflix subscribers are international. For a better understanding of how much Netflix has grown over the past years, let’s take a look at their average stock prices.

 

In 2010, Netflix had only 20 million subscribers who were only from the U.S. In 2012, the streaming platform had already attracted a small number of international subscribers totaling to 25 million, including U.S. citizens. Soon, in 2016 the amount of U.S. and non-U.S. subscribers equaled. The number of subscribers is directly connected to the volatility of the stock. Let’s take a look at the previous five-year stock trend Netflix had.

 

In 2015, the average stock price per share of Netflix was only $96.73, with approximately 65million subscribers. A year after, the stock price per share grew by around 5.4%, amounting to $102 with 80 million subscribers. In 2017, the company had outstanding results compared to the previous years. More specifically, the stock price per share grew from $102 to $165. The management’s aim in 2017 was to increase the operating margin. The company was able to add almost 16 million subscribers to the website, which outperformed what they were anticipating for the whole year. They have also increased subscription prices, which led them to have a higher profit. CEO Reed Hastings summarized 2017 results by saying that in 2018 they will have much more than just gain in subscribers’ volume.

 

Guess what? Netflix’s average stock price per share grew from $165 to $319, which is almost 93%. According to UBS Analyst, Eric Sheridan, the reason behind such an increase is that Netflix has emerged as a content powerhouse that is considering the global marketplace needs. They have added Netflix’s original movies, which attracted millions of users globally.

The founder and president of Strategic Wealth Partners tell that the critical success factor behind Netflix is that it is the dominant player in the market, and even an increase in prices would not hurt them to lose customers. Speaking of subscription prices, from 2014 to 2018, the subscribers of the basic package had to pay $8 for the service, which increased by $1 in 2019; meanwhile, the Premium and Standard package prices increased by $2 at once.


All in all, Netflix has shown excellent historical performance on the stock trend. It is a vivid illustration of how globalization and extending the marketplace has helped the company to increase its sales and skyrocket their financial indicators. For the next couple of years, as Netflix decides to increase the prices of the subscription packages, the stock will continue to rise. Just like Mark Tepper says, raising the rates would not decrease their subscribers, as they get a variety of addictive and high-quality T.V. shows and movies.  So, if you are thinking about a profitable investment, Netflix is the one you may think of.

February 28, 2020

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