Content is king, but who are the biggest players in today’s streaming wars? You can’t have that discussion without talking about Netflix (NFLX). The company that once sent you DVDs in envelopes is announcing its first quarter results.
From the stock market reaction to the advertising business and the all-important crackdown on password sharing, here are three key issues shareholders will be watching.
video transcript
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Brian Sozzi: Netflix’s profits are also rising. Here are three things every investor should be aware of. First of all, there’s the reaction to Netflix’s financial results. With the stock price up 30% year-to-date, you probably want to see if you’re bullish on Netflix stock. Despite the year-to-date rally, we’d like to see the stock rise initially. If the stock market crashes, it could be a sign that the stock market as a whole is overvalued and it’s time to get out in earnest.
Second, we want to know how much financial improvement Netflix can achieve with its new ad tier business. This was a significant development for Netflix last year. Many people I spoke to on the street hope that this advertising business will finally start to bear fruit and bring significant economic benefits.
And the third and final thing you need to know about Netflix’s revenue, what is the increase in page sharing? It was thoroughly cracked down. And in the fourth quarter, the password crackdown led to a net increase of 13 million. The Street is hoping that number will be around 7 million or 8 million this time around. If Netflix can do that, or if it does, its stock price will likely rise significantly.
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