When brick-and-mortar movie rental companies were a big deal, Netflix decided to disrupt the staple movie rental industry, forever changing how we “rent” and view movies. It wasn’t long after that Netflix became a major player in the entertainment industry, now worth $173.5 billion. But this entertainment service company didn’t start that way.
Netflix began as a mail-order DVD rental service. Customers selected the movies they wanted to rent online, and they would arrive in the mail. When you were finished, sending DVDs back in a prepaid envelope was easy. And once you did, you received the next one on your list. Now, the company offers a subscription service streaming movies—thousands of titles and television episodes. Customers pay a monthly fee to view movies or TV shows whenever they want, without the hassle that renting requires.
As you look to purchase stock, we will briefly review the history of Netflix stock and its potential for your portfolio. Also see our Peloton, Bytedance, Truth Social and SpaceX analysis.
Netflix Stock (NFLX)
Netflix went public in 2002 with an IPO of 5,500,000 shares at $15 per share. The true company name is Netflix, Inc., and the ticker is NFLX. Since going public, the company has had a fairly consistent performance. The company has even begun to film and produce their own content, making them a major player in Hollywood.
In 2020 Netflix shareholders held a total of 454 million shares outstanding. It isn’t a representation of how many shares each person held but the total number of shares held at that time. Since Netflix was founded and went public, it hasn’t offered dividend yields to its shareholders. As of March 2022, Netflix stock is priced at $382 per share.
Timeline of the Streaming Entertainment Service Company Giant
As part of your research into Netflix, consider its history:
- 1997: The company was founded in Scotts Valley, California, as a rent-by-mail DVD service by Reed Hastings and Marc Randolph.
- 1999: Netflix changed from a pay-per-rental model to a subscription service.
- 2002: The company went public with 600,000 subscribers.
- 2003: Netflix hit 1 million subscribers.
- 2007: Streaming was introduced and only worked on PCs and Internet Explorer.
- 2009: The company added streaming for Playstation and smart-TVs and hit 12 million subscribers.
- 2010: Netflix expanded to Canada and then to the UK and Nordic countries in 2012.
- 2013: Netflix received numerous Emmy nominations and other awards. The company continued to expand globally in 2014 and 2015.
- 2015: By the end of the year, the company had over 50 million subscribers.
- 2016: Netflix expanded to 190 countries and 21 languages. The company also added the “Download” feature to specific titles allowing subscribers to view shows offline.
- 2020: Netflix grew to over 180 million subscribers globally.
Netflix Co-Chief Executive Officer
Reed Hastings, Founder and CEO of Netflix inc, announced in 2020 that Ted Sarandos would become Co-CEO and remain Chief Content Officer. Hastings and Sarandos’ partnership began early in Netflix, while Sarandos pushed for original content, Hastings pushed for streaming services. Both were and still are instrumental in what Netflix is.
Netflix Competitors
At first, Netflix didn’t have many competitors in the entertainment field. As Netflix transitioned to a streaming entertainment service company, other companies started to jump into action. Today, Netflix has quite a bit of competition, including:
- Amazon Prime Video
- Hulu
- YouTube
- HBO Now
- Sling TV
- Disney+
- Peacock
- Apple+ TV
- Paramount+
- Discovery+
While new competitors pop up every day, Netflix still holds its position as a top streaming platform attracting major movie and tv stars, pre-programmed smart tv capabilities, and millions of subscribers. Netflix is truly a part of our culture regardless of competitors.
Netflix Market Cap
Before we look at Netflix’s market cap, let’s review what the cap is. Market cap refers to Market Capitalization, which is the total value of all the shares outstanding of a company’s stock.
Netflix has received many awards, launched many original movies and series, and expanded to more countries. Each action has helped Netflix reach a market cap of $168.51 billion as of March 2022. According to its data, this puts the company among the top 100 most valuable companies.
How is Netflix Doing in 2022?
As of March 2022, the Netflix dividend yield is $0.00 and 0.00%. Instead of giving a cash payment to shareholders or increasing the number of stocks they hold, the company assumes that shareholders will get their money’s worth by selling their shares.
The PE Ratio or Price-to-Earnings Ratio is an easy way to see if the stock is being overvalued or undervalued. As of March 2022, Netflix has a P E Ratio of 34.36. This is not the highest Netflix has ever been, but it’s also not the lowest.
Over the past 52 weeks, Netflix has had a stock price anywhere from $351.46 to $700.99. The median price is about $526. Over the past month, Netflix stock has seen quite a few ups and downs. However, the company has consistently grown over the last five years. We can assume its growth is due to its content creation and success in movies and shows like Red Notice, 2021, and Stranger Things, 2016-Current.
Netflix News
Netflix is constantly looking to improve its services while also earning more revenue. As a common problem, subscribers share their passwords with friends and family, reducing the revenue Netflix could be earning. To combat this problem and accept that it is a fact of online media, Netflix is exploring the option of allowing subscribers to add members that are not directly in their household to their account for a small additional fee.
The Verdict on Netflix Stock
While the nostalgia of rental stores still burns in our minds, we don’t see streaming services going away. As the future of online streaming continues to evolve, investors are itching to see where it is headed.
While Netflix stock may not be the right choice for a first-time investor, someone who knows what they’re doing and understands that there can be drastic changes in Netflix, Inc. stocks could see a good purchase in their shares.
