How to buy Netflix shares (2024)? – invest in Netflix stocks
Do you want to know how to buy Netflix shares? Netflix is the largest paid provider of movies and series, with over 230 million users. In this article, you can read if it is wise to invest in Netflix stocks.
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What is the Netflix stock price?
Below, you can see the current stock price of Netflix. You can also use the buttons to open a new position on the stock.
Netflix Company Information
Below, you can see the most important company information of Netflix.
Netflix stock Analysis
Before deciding whether to buy or sell Netflix stocks, it is essential to analyse the stock first. In the overview below, you can see how Netflix has developed over the past period.
Stock prices of the last 5 days
In the table below, you can see the stock prices of Netflix for the last 5 days:
Why is the Netflix stock price plummeting?
In 2023, the stock price of Netflix has dropped significantly, by more than 60%! This is despite the fact that the stock performed very well during the pandemic. But why is the Netflix stock performing so poorly now, and can this improve in the future?
Reason 1: Uncertainty
Investors are now very fearful. High inflation and the war in Ukraine make many investors prefer to sell their stocks. This uncertainty also has a strong influence on the Netflix stock price. Interest rates have a significant impact on growth stocks like Netflix.
Reason 2: Decreasing user numbers
Netflix has lost users for the first time since its inception. Meanwhile, you can see that competition is growing. The company has lost many users in America, where it recently raised prices. Netflix also lost users in Europe, but this is mainly due to the loss of Russian subscribers.
Market share of Netflix in America
Is it wise to buy Netflix stocks now?
The stock price of Netflix has dropped significantly. However, Netflix is not standing and has a plan to attract new users.
Plan 1: cracking down on account sharing
An estimated 100 million households are still using Netflix for free by sharing their accounts. This causes Netflix to miss out on a lot of revenue. The company is considering banning this practice or charging extra for it. If this does not lead to a mass loss of subscribers, the company can increase its revenue by cracking down on account sharing.
Plan 2: launch advertisements
Netflix is also considering launching a cheaper subscription plan with ads. This allows the company to attract a group of people with a smaller budget.
Plan 3: unique content
Netflix wants to further improve its service level and release even more quality content. If Netflix manages to release more popular series and movies, it can attract new members.
What do you think; are these measures enough to make buying Netflix stocks attractive again?
Reason 1: many users & market leader
Netflix can be an appealing investment. Currently, the company has over 200,000,000 paying customers spread across 190 countries. The company is exploring the possibility of entering the Chinese market. Within the Chinese market, there are now over 500,000,000 people using streaming services. If Netflix manages to become active in this market, it can greatly increase profitability.
Reason 2: strong bargaining position
Because Netflix has many users, the company can negotiate well with studios. This allows them to make good deals that can contribute to the profitability of the company.
Reason 3: strong content
Netflix has an extensive library of content that users can’t get enough of. The company is also good at releasing its own unique content. A good example of this is the successful Squid Games, which was watched for a whopping 1.65 billion hours!
With increasing competition, it will become increasingly important to create unique and attractive content. Netflix seems to be able to distinguish itself well with its Netflix Originals.
Reason 4: international presence
Netflix is active in many countries, which makes it possible to offset poor performance in one region by good performance in another region.
What are the risks of investing in Netflix stocks?
Risk 1: competition
However, there are also risks associated with investing in Netflix stocks. The biggest risk to Netflix’s survival is competition. In the past period, many similar services have been launched.
Amazon, Disney, and Apple have also launched their own streaming programs. Netflix will constantly have to fight for the best content. If they can no longer do this, there is a good chance that users will switch to another platform.
Risk 2: piracy
Piracy is also a risk to Netflix’s survival. Precisely because so many steaming services have been added, you can see that Netflix no longer always succeeds in buying the rights to new productions. People are then forced to subscribe to multiple services to watch all the new movies. If Netflix becomes less user-friendly than illegal alternatives, this could lead to a decrease in the number of customers for Netflix.
Risk 3: unique productions are expensive
The unique productions that Netflix produces are costly. In 2021, for example, the company invested $17 billion. Producing one episode of The Crown costs $13,000,000!
The series then has to become a great success to continue to achieve good results. Whether Netflix remains successful overall will strongly depend on what users think of the platform. If interest wanes or another streaming service becomes more popular, it may be wise to sell your Netflix stocks.
What are Netflix’s biggest competitors?
- Amazon: with Amazon Prime Video, Amazon is a formidable competitor of Netflix.
- Apple: Apple has also launched its streaming service under the name Apple TV+.
- Walt Disney: Disney is also competing with Netflix through its service Disney+.
- AT&T: this company competes with Netflix through the popular HBO Max.
Step 1: Research Netflix stocks
Before buying Netflix shares, it is important to go through some steps. Before investing in Netflix, it is critical to do research. Determine with your analysis whether you think there is a lot of growth potential behind the company. If this is the case, you can consider buying Netflix shares.
It is essential to determine for yourself whether Netflix shares fit well within your investment plan. Netflix is a technology stock with relatively high risk and potential high growth. When adding Netflix shares to your portfolio, it is essential to consider whether this type of stock suits you.
For example, would you mind losing a large portion of your investment? And do you have enough time to wait for the stock to perform well when the market is not performing well?
Step 2: Open an account with a broker
When you are certain that you want to buy Netflix shares, you need to open an account with an online broker. A stockbroker is a party that makes it possible for individual investors to trade in stocks. It is recommended to choose a broker with low transaction costs for the US market.
When placing an order, you must consider how many shares you want to buy. The answer to this question strongly depends on the total amount you would like to invest. It is always advisable to diversify your investments as much as possible. This prevents you from losing a large portion of your money on your investment in Netflix stocks.
With a market order, you buy the share directly, and with a limit order, you can set a price at which you want to buy the stock.
What will be the stock price of Netflix in 2024?
Are you curious about what analysts think Netflix will do in 2024 and the years to come? We have combined analysts’ predictions using data from Alpha Vantage. Keep in mind that this figure is only a prediction of Netflix’s stock performance, and this prediction does not necessarily have to come true.
The price development of Netflix in 2024 will depend, among other things, on:
- The number of new paying members within Netflix
- The development of Netflix compared to its competitors
- The development of inflation and interest rates
How did Netflix originate?
Netflix was founded in 1997 and has been around for quite some time. Unlike popular applications like Popcorn Time, Netflix is 100% legal. The company buys licences to show series and movies in different countries. Although the company initially mainly focused on the American market, Netflix is nowadays conquering the rest of the world.
The international expansion was initiated by Netflix in 2013. During this period, the Netflix stock price rose sharply. The European market is large, and internet speeds are improving. This means that the market for Netflix is still growing.
Of course, a company also has to make a profit. Netflix makes a profit by making users pay a fixed monthly contribution. This seems to work better than the business models of other streaming services, where you have to pay per movie.
Netflix shares have performed very well in the long term. The company has attracted many users and is the market leader in video streaming. An investment in Netflix stocks may therefore be interesting for investors with a high risk tolerance.
However, it is important to keep an eye on the competition. If many users switch to competitors, the Netflix stock price may come under pressure.
When I was 16, I secretly bought my first stock. Since that ‘proud moment’ I have been managing trading.info for over 10 years. It is my goal to educate people about financial freedom. After my studies business administration and psychology, I decided to put all my time in developing this website. Since I love to travel, I work from all over the world. Click here to read more about trading.info! Don’t hesitate to leave a comment under this article.