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Netflix: What To Expect In The Future

Aug. 03, 2022 10:11 AM ETNetflix, Inc. (NFLX)AMZN, DIS, AAPL5 Comments
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Invest Heroes


  • The streaming services market should continue to grow, albeit at a slower pace.
  • The streaming services sector should safely get through a recession.
  • New monetization opportunities are the main drivers of Netflix's stronger financial results.
  • We maintain BUY status for Netflix as the financial results of the company are likely to improve due to growth of the streaming services market and increasing monetization opportunities.
  • New strategic management initiatives shall make it easier for Netflix to overcome temporary difficulties.

Entertainment Industry Workers Vote To Strike, Threatening Hollywood Productions

Mario Tama

Investment Thesis

Strong reaction to the Netflix, Inc. (NASDAQ:NFLX) Q1 report created a good opportunity for long-term investors, and even after the subsequent positive report, there is still a high upside of the stock. The

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Invest Heroes profile picture
Invest Heroes LLC is a CIS-based research firm founded in 2018. Since then, we provide equity and fixed income research services which become more and more well-known locally among both professional investors and private clients. Here’s what we do: - Cover top 120+ Russian, US and Chinese stocks - Cover 200+ Russian bonds (corporate, SOE’s) Provide our research as a paid service to several institutional clients, a couple dozen of asset managers/PM’s and about 3000 private clients Our team consists of 2 strategists as well as a team of analysts (equity market team & 1 fixed income). 9 analysts are currently working in our team, which has achieved global professional recognition. In the first year, we got into the Refinitiv and Factset, in the second year our estimates began to participate in the Refinitiv consensus, in the third year we are the best analysts in the Refinitiv rating for a number of Russian companies and we are in a process of signing with S&P Market Intelligence. Our forecasts are often ahead of the market, because of detailed business model built for each company. Contact details Sergey Pirogov CEO +7 (919) 762 76 64 s.pirogov@invest-heroes.ru Aleksandr Sayganov Head of Research +7 (708) 1238294 a.sayganov@invest-heroes.ru

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Comments (5)

Tom White profile picture
I agree with your conclusion. It is a buy at this price for long term investors.
long netflix at 350, enough said. on track to going back to 500+
Tom White profile picture
@karondongotbanned I have a target price of $501 also.
nerd_rage profile picture
Why should this battle be about original franchises? If it is, everyone is in trouble since successful original franchises are a rarity. WBD has one in Dune but they don't come along very often and involve random luck. There are many ways that Dune could have been a failure but only one narrow path to success.

Much better: established franchises. That's why Obi Wan was a hit. On its own merits, it would have sunk like a stone. Well, on its own merits it never would have been made. It exists only so Disney can scream OBI WAN at everyone - a recognizable name.

So given the array of franchise owners that NFLX faces, what are its prospects both domestic and international? Beyond monetization strategies (which all the competitors can do, too), what kind of content strategies would be successful? Cheap localized reality TV to control the budget in low ARPU regions? How important will it be to have locally popular sports?

How about some discussion of existing local competitors? What's it like in India anyway - free/ad-supported is my impression. Can the new competitors like NFLX charge money or do they need to figure out how to make free work?
Invest Heroes profile picture
@nerd_rage We're still concerned that Netflix has permanently consolidated the leadership position in the area of content and streaming services in the domestic market and is rather successful overseas. Of course, in the developing markets there are lots of consumer preference differences compared to the US, but the latest investment activity of Netflix looks rather flexible to us in terms of audience targeting. Taking a closer look at what the company did in APAC market (especially, South Korea), we believe that the pay-off is obviously strong.
Also the interesting case is adopting Netflix popular franchises to local markets, like what they recently did with La Casa De Papel. Management also released its strategy in mobile games segment which is developing at a fast pace (More than 20 mobile games already). We think these are significant precedents and they show the variety of audience intake methods.
Moreover, we feel confidence about the international acceptance of service just because of team quality factor. Hiring local management and contracting native authors is the way to take native preferences into account and gain competitiveness abroad.
Talking about charging money in the international local ARPU markets - still the point of content to us. We mean the variety and quality of titles compared to locals is overwhelming. And adoption of ad-supported services next year makes a still cheap (not in terms of comparison to peers , but absolutely) service even more cheap.
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