Why Investors Should Consider Netflix In The Next Market Crash

    Why Investors Should Consider Netflix In The Next Market Crash   The streaming pioneer continues to improve its profit margins, adding millions of subscribers today. Netflix  NFLX (NASDAQ) $585,37 +12,23 (+%2,13) the streaming content pioneer, Its great location is due to the fact that more and more people around the world are choosing to stream their content rather than watching it on linear TV. The scale of the company gained millions of new subscribers during the pandemic, resulting in improved profit margins and cash flows. The only downside to investors is that Netflix's success is no secret to the market. However, during a stock market crash, Netflix's stock could drop with the broader market, giving investors the opportunity to buy this excellent performance at a lower entry point.

Subscriber growth fuels profits

Netflix has 209 million paying subscribers worldwide, including the US and Canada. As they continue to get to know their viewers better and customize their experiences to better suit their needs, the company can increase its market share in viewing hours. This too It can open the way for the company to increase pricing power and the ability to increase monthly fees without losing subscribers.  

Why Investors Should Consider Netflix In The Next Market Crash

  For now, the results are already pretty impressive. The company's growing scale also improves profit margins. Indeed, in the most recent quarter, Netflix's operating margin was much higher than it achieved in the same quarter last year.

Reducing the risk of competition

The biggest improvement for Netflix in 2020 and 2021 was the market's reduced perception of competitive risk. During this period, many competitors entered the market. (like Disney+) It has nonetheless given rise to confidence in the argument that these do not harm Netflix and may even help the streaming category as a whole.

A market crash can present an opportunity

Such a drop in Netflix shares during a stock market crash could allow investors to buy it at an even more convenient entry point.  

Source: The Motley Fool

 

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