Netflix Stock ( NASDAQ:NFLX )
Netflix ( NASDAQ:NFLX ) has nearly doubled from its 52-week lows, and the company’s market capitalization is now back above $140 billion. But, as we’ll see in this article, the company is still risky because its business needs to grow, which means Netflix stock is not a good investment anymore.
Netflix Is a Follower of Trends, Not a Leader
As the market got more expensive, Netflix had to start following the trends. After avoiding ads for a long time, the company recently announced an ad-supported tier. They needed a way to make more money and decrease the prices customers pay directly. It needs to be clarified what will happen.
At the same time, the company has had to scale back some of its goals, like its video game division, and increase the number of movies it puts in theaters after realizing how well the traditional media model works. When the company was the only streaming service, these advantages were easy to avoid, but they are becoming harder to avoid as competition grows.
Netflix Has Nothing Else to Offer
The main problem with Netflix is that it has nothing else. They are just streaming services. A traditional media company like Disney can get different kinds of income from theme parks, theater releases, streaming, and cable ( NYSE:DIS ). That means all of Netflix’s money must come from a single business.
Netflix adds new shows but doesn’t make any more money because of it. Even if Disney doesn’t make money from a show on a streaming service, it does from selling toys, getting people to visit its parks, and taking cruises. It strengthens the business and lets the company make much less money in its streaming bu...
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