After revolutionizing the video rental game, Netflix (NFLX) has taken on TV, and it’s winning. As I write this, shares of NFLX are up almost 50% year-to-date. That’s a tremendous run, even for an Internet behemoth like Netflix. So, the question on everybody’s lips right now is what’s next for this movie and television streaming giant?
Founded back in 1997, it’s hard to remember today that Netflix started by simply sending individual video rentals through the mail. Within two years, the company introduced their video subscription model. This led to an IPO in 2002, which turned Netflix into a major player in the video rental game.
After taking on the likes of video-rental giant Blockbuster (and winning), in 2007, with streaming services taking off online, Netflix quickly moved into and became a leader in online movie and television streaming as well, eventually even producing its own original shows and films. With this new business model, Netflix has been able to thrive while its original DVD-distributing competitors have fallen by the wayside.
Today, primarily functioning as an Internet television network, Netflix engages in the online delivery of media across devices to individuals and families around the world. It offers its members the ability to receive TV shows and movies, including original series, documentaries and feature films through a host of Internet-connected screens, such as TVs, digital video players, TV set-top boxes and mobile devices. The company also still provides its original DVDs-by-mail membership services.
So, what’s next for this Internet giant?
Well, according to recent data from analyst firm Piper Jaffray, Netflix could see its international subscriber base surge 42% in the third quarter of this year. The analyst also expects Netflix’s U.S. subscriber base to increase 10.9% in the same quarter. In fact, in the first six months of 2017, Netflix already boasted a subscriber base of 51.9 million Americans alone and 52 million more international subscribers. Piper Jaffray expects Netflix’s international subscriber base to reach more than 100 million in the next three years.
These are only a few of the reasons why Netflix maintains an overall A-rating in my Portfolio Grader tool. A few other reasons are it has excellent sales and earnings growth as well as positive analyst earnings revisions. All-in-all, as one of the four tech FANG stocks (along with Facebook, Amazon and Google’s parent Alphabet), Netflix remains a powerful contributor to any investor’s market-beating portfolio these days.
I continue to expect big things from this high-tech disruptor. So, if you want to stay up-to-date on Netflix and many other market leaders, stay tuned in right here to this blog where I share my thoughts on investing throughout every week of the year.