Is a NETFLIX Comeback on the Horizon?

‘In the short run, the market is a voting machine but in the long run, it is a weighing machine.’ — Benjamin Graham

Is a Netflix comeback on the horizon?

NETFLIX started the year on a rough note as the platform reportedly lost 200k subscribers in Q1-22, the first time in over a decade. The streaming giant is also expected to lose 2 million more subscribers in the second quarter of 2022. Can NETFLIX make a rebound from this trajectory? How will NETFLIX fare during the post-lockdown era?

1. Federal Reserve hawkish policies have led to a tightening of the money supply. Withdrawal of trillions of dollars from risky assets; equities and cryptocurrencies. NETFLIX is currently the worst-performing stock in the S&P 500, down 70% year-to-date as of the time of writing this report.

2. Inflation is putting pressure on margins, worsened by China’s zero-COVID policy and the Russia-Ukraine conflict. With an EBITDA of $17.9bn, NETFLIX’s EBITDA margin fell to 60.5% in FY2021. Profit after tax also fell to $1.9 billion, and the PAT margin fell to 6.7 percent, according to the company fillings.

3. Why BUY NETFLIX? NETFLIX is reorganising internally in order to improve member retention rates by focusing on high-quality content and reducing costs.

Download the full report below: