DIS - Netflix Q4 2023 Outperformance Solidifies 3 Tailwinds For 2024 (Upgrade)

2024-01-23 18:55:08 ET

Summary

• 2023 was a breakout year for Netflix, Inc., as it consistently has proven a turnaround with improved monetization of its normalizing subscription base.
• Despite a moderated pace of growth from its heydays, Netflix has proven a competitive advantage in expanding margins and bolstering cash flows needed to maintain its moat amid increasing competition.
• Looking ahead, Netflix is expected to stay resilient in 2024, with tailwinds including ARM expansion, cyclical ad spend from the Summer Olympics and U.S. elections, and the advent of AI.

Macroeconomic headwinds and intensifying competition have been two of the biggest challenges facing Netflix, Inc.’s ( NFLX ) (NFLX:CA) inherently cyclical business in 2023. And the same portfolio of headwinds is expected to spill into the new year. On the macro side, looming recession risk persists despite signs of slowing inflationary pressures that support eventual easing of financial conditions. Meanwhile, on direct Netflix competition, Amazon ( AMZN ) is now furthering its grip on the digital advertising industry by selling placements on its Prime Video service....

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