While the market has been generally buoyant for the last 5-6 months, a few tech and media stocks have been “killing-it” more than ever. Interestingly, this is not just a short-term trend. Even on a medium-to-long-term basis a bunch of these stocks seem to have gathered a lot of positive popular opinion. Netflix (NASDAQ: NFLX) is one such stock. Being at the intersection of tech and media also helps. These are both sectors that are going through massive evolution right now and are attracting a lot of positivity.
Here we analyze NFLX for external signs to see how it’s holding-up.
Social Media Pulse
The below chart shows how closely followed Netflix is on platforms like Twitter and StockTwits. One can understand that the business has a super-active brand given its massive social presence and huge consumer base, but not for every brand does this translate to similar popularity among investors and traders. Netflix sets a pretty high bar for other consumer brands.
Over the last couple of months, there have been multiple minor spikes in its social media pulse but the latest one is just massive – and closely correlated with the 6% price rise around the same time.
Company analysis & performance forecast
The short-term sentiment is up and confidence meter shows that the Wall St community is quite bullish about Netflix. Most recently, the imminent Chinese entry is the talk of the town. The licensing deal with iQiyi sounds interesting especially considering how difficult most consumer-tech companies from US have found the Chinese market to be (Uber being the latest case in point, in a long list of non-starters).
Finally the most significant long-term predictor – Revenue! And here’s what’s most interesting about Netflix – revenue has been on the up and up, and looks like most analysts feel that that’s going to be the case in at least the foreseeable future. Maintaining this rate of growth is never easy though, so one is well-advised to see how the estimates change/move as we get closer to the next earnings announcement.
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