Undoubtedly, the listed Netflix has been one of the values that has given the greatest game to investors in the past year. Now the question of these is whether this scenario will repeat itself in 2020. It must be remembered that Netflix, Inc. is an American entertainment company whose main service is the distribution of audiovisual content through an online platform or service of Streaming VOD. Although it is listed on the equity markets of the United States and for which its operations will be more expensive with somewhat higher commissions than in the national financial markets.
In any case, few analysts in the stock market doubt that Netflix has been one of the great sensations since it decided to go public. With an appreciation in the valuation of their prices that has shot up to 79%, one of the highest returns that equity markets have provided in this period. From this point of view, it seems somewhat complex to us that it can behave with the same intensity from now on. In this sense, future buyers of your shares may be late to their positions to make their available capital profitable.
Netflix is a company that has been listed for a very short time in the equity markets of the United States and in this sense it has been a very positive development for small and medium investors. To the point that it has maintained, and in a certain way has, a very clear upward trend in the background, although with the first signs of weakness in its price. Not surprisingly, a large part of the minorities have decided to exit their positions to enjoy the capital gains accumulated up to now. Another very different thing is what you can do in the next few months.
Netflix with a rise in profits
One of the strengths of this company is the net profit that it shows in its income statement. By contributing a total of 1.866 million last year, which represents an increase of 54% compared to the same period of the previous year. It also did better in terms of revenue and subscriber growth, being one of the factors that has been based on its very vertical rise in the US equity market. To the point that in 2019 it has added around 8,76 million new subscribers globally.
Prospects for the coming months are also positive, although not under the intensity developed in 2019. This fact can undoubtedly affect its evolution in the American stock market, but it may continue to rise, which is, after all, one of its main objectives. Especially in a stock market exercise that is expected to be somewhat difficult for the US stock market after its seemingly endless rises. Because at any moment the corrections will have to arrive and perhaps they will be ahead of schedule by financial analysts.
You will invest in quality content
Of course accounting figures are good, or rather excellent. But even if it can continue to grow, it will be very important that you continue to invest in good content and also that you review the issue of prices. As a pending issue that it has before users around the world and on which its valuation in the stock market will depend from now on. With no apparent competition within its sector and this fact supports its commercial prospects for the coming years. Although taking into account the limitations that we have previously exposed and that are one of the weak points of value at the moment and despite the good times that it has given to small and medium investors who had their buying positions open in the stock market.
While on the other hand, we must also emphasize the fact that Netflix is a company that has a high potential level of clients. To the point that many of them are young people with high purchasing power and who have made contracts to view the contents of this social media. To the detriment of general television channels that may be penalized in this sense and with a decrease in the configuration of their prices, as can be seen in the last sessions on the stock market. Being one of the sectors with the worst technical aspect in recent months. With a target price that has been lowered by the most relevant financial analysts.
In favor of entry into their positions
Of course, Netflix has a very good technical aspect despite the corrections it has developed in recent months. Where it is perfectly possible that it reaches more ambitious levels from now on due to the buying pressure that investors can exercise. On the other hand, it cannot be forgotten that this value is in a clearly bullish channel and one of the most relevant in the United States stock market. Above other sectors and that in any case you can say that it still has a journey, although not with the same intensity as up to now.
It can also be said that this American company has opened itself to a good part of the users from all over the world and this is an aspect that makes it very suggestive so that it continues to grow in terms of its price in the financial markets. At this time, investors who have taken positions can continue with it due to the possibility that it can go to more ambitious levels. While if you are out of their positions you can take advantage of a price cut to try to make the capital available for investment profitable. With a more attractive price and therefore has a better chance of generating higher returns.
Positions against value
On the other hand, and as a more negative element, is the fact that this value has grown a lot since it was listed on the equity markets. With a very vertical rise that can stop at any time, or at least developing a very important correction that can take its price much lower than it is at the moment. Being one of the most relevant risks that Netflix presents right now and that can encourage the exit in their positions to be a reality from now on. Although it is supposed not with much intensity.
In addition, it is a value that can be very sensitive to changes in the growth of the international economy. From this point of view, it can be considered as a cyclical value or what is the same, which has its best results in periods of economic expansion and, on the contrary, in recessions, it can generate significant drops in its price. For this last reason, you have to be very attentive to the supports that can be exceeded from now on and that in some cases would serve to abandon their positions to avoid more complicated situations in the company. Because as small and medium investors know well, nothing goes up forever, much less in the always complicated world of the stock market.
Big differences in their prices
On the other hand, it is also necessary to emphasize the fact that this class of values are very complex to operate due to the great volatility that they present in the conformation of their prices. This makes it a bit more difficult for small and medium investors to rush into and out of the equity markets. In any case, it is a stock market value that has in its favor the fact that the party seems to still be installed in the equity markets of the United States which is where this social media company operates. Apart from the corrections that may occur and that in fact have occurred in this financial market.
With figures that are as strong as they are considered as good. Although, as we said at the beginning, they need to continue growing, both in new lines of business and in their own audiovisual content. But in a better position than the listed companies that are dedicated to more traditional businesses within this sector. Regarding the generation of advertising and that is the fact that has penalized the companies that are integrated in the national continuous market the most. As for example, in the specific case of Atresmedia and Mediaset.
In any case, Netflix is one of the options that investors should consider to integrate their next investment portfolio. Although perhaps not with the performance generated up to now, in which it has exceeded levels above 50%. One of the highest in equities on the other side of the Atlantic and to the surprise of many users.