Mohammad Louay Alakhrass @Louayalakhrass: "Is Netflix (NFLX) Becoming a..."

France

Is Netflix (NFLX) Becoming a Buying Opportunity? Netflix has fallen more than 40% from its peak, but the underlying business tells a very different story. While the market has focused on slowing subscriber growth, Netflix has quietly transformed into a significantly more profitable company. Today, NFLX trades at roughly a 34% discount to its 5-year average EV/EBIT multiple, despite EBIT growing around 18% year over year. That disconnect between price and fundamentals is difficult to ignore. Why the investment case is improving A stronger, more profitable business model Subscriber growth has naturally moderated after the post-pandemic boom, but monetization continues to improve. Netflix is generating more revenue per user while keeping operating costs under control. Powerful operating leverage 🟢Revenue per subscriber: +7.8% 🟢Costs: +2.4% 🟢EBIT per subscriber: +9.7% This is exactly the type of operating leverage that long-term investors look for. A durable competitive advantage Netflix maintains a churn rate of around 2%, well below many competitors. Even after multiple price increases, customers continue to stay, reinforcing Netflix's position as an essential entertainment platform. Scale matters With approximately 325 million subscribers, every dollar invested in content is spread across an enormous global audience. That creates a structural cost advantage that smaller streaming platforms simply cannot match. The next major growth engine: Advertising The advertising business could become one of Netflix's biggest value drivers. Management is targeting approximately $3 billion in advertising revenue by 2026, with long-term estimates reaching $8 billion by 2030. Even more interesting: 🟢Advertising inventory fill rate is still only around 45%, leaving substantial room for expansion. 🟢About 80% of ad-supported subscribers are active every week. 🟢Average revenue per user (ARPU) can continue to rise without relying solely on new subscriber growth. This creates an attractive path toward higher earnings with improving margins. Key catalysts ahead 🟢Q2 earnings release (coming soon) 🟢Continued improvement in advertising monetization 🟢Margin expansion (guidance around 31.5%) 🟢Potential upside from live sports rights 🟢Growth of Netflix Gaming in a market worth more than $150 billion My view Netflix is no longer just a subscriber-growth story. It is evolving into a highly efficient cash-generating business with multiple long-term growth drivers. The market still seems to value the "old" Netflix, while the company itself has become a much stronger business. Could volatility continue? Absolutely. But for long-term investors, periods when price and fundamentals diverge often create the most compelling opportunities. I continue to view Netflix as a company worth accumulating gradually, especially ahead of key catalysts. 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗱𝗲 𝗺𝗼𝗻 𝗽𝗼𝗿𝘁𝗲𝗳𝗲𝘂𝗶𝗹𝗹𝗲 𝗮𝘂 𝗳𝗶𝗹 𝗱𝗲𝘀 𝗮𝗻𝗻é𝗲𝘀 : 2020 : +48,73% ✅ 2021 : +14,44% ✅ 2022 : -30,88% ⚠️ 2023 : +34,57% ✅ 2024 : +21,65% ✅ 2025 : +21,91% ✅ 2026 (YTD) : +16.77% ✅ 📊 Points clés : ✅ Total growth since inception: +170.07% 📈 Average annual return: +18.65% 📅 Profitable weeks: 62.96% 💰 Estimated dividend yield: 1.00% annually 🚨 Risk Score: 4–6 (Moderate) 🕰️ Long-term investor 🛡️ Diversified portfolio 🤝 Copy Trading 🤝 Ce portefeuille est conçu pour générer des performances long terme, combinant croissance du capital et revenus via dividendes. La patience et la discipline émotionnelle sont essentielles pour investir dans cette stratégie. Si vous décidez de copier mes positions, il est recommandé de commencer avec un minimum de 400 $ et de bien activer la copie des positions ouvertes. Pour plus de détails sur ma stratégie, vous pouvez consulter mon profil eToro et le post épinglé : « Les caractéristiques essentielles de mon portefeuille » ou via ce lien : etoro.tw/4dqIcZA $NFLX (Netflix, Inc.) $UK100 $GER40 $FRA40 $SPX500

Not investment advice. The author may have financial interests in the mentioned instruments.