Netflix Weekly Chart

The share price trajectory of Netflix over 2017 was nothing short of impressive. With shares beginning at $126 before moving over 50% higher to $193, the company has seen the same kind of performance in 2018 moving to a recent high of $226. This is no surprise to me: With the company having surprised in Q3 last year by adding 5.3 million users, significantly ahead of its own expectations, the business model of multi-viewable platforms, newly added downloadable content, exclusive award-winning content like Stranger Things and being able to cancel subscriptions any time is clearly paying dividends.

With all eyes on the company ahead of their Q4 earnings update and shares currently near all-time highs, expectations for the stock will be high. The positivity around the stock is justified, but for the next leg higher in share price valuation, I see a couple of things on the horizon that could certainly slow the upside growth.

Firstly, very shortly we have the Winter Olympics. This is 17 days of almost non-stop televised sport. In 2012 and 2016, Netflix warned of the effect that the Olympics would likely have on viewing figures.  Secondly, Prime is catching up!  Amazon Prime has made some of its own exclusive award-winning content recently and the cost-saving synergies of having the monthly subscription incorporated with free delivery on packages could affect new customer sign-up rates at Netflix.

 

Jordan Hiscott,

Chief Trader

 

The above-mentioned market views and content reflect only the opinion of the author, not that of ayondo. This service is for informational purposes only and does not constitute advice or investment advice.

« Back to the ayondo Blog