This article discusses the recent performance of Netflix and its stock, as well as the reasons behind its popularity. The article notes that Netflix's revenue growth in the second quarter was only 2.7%, below projections, indicating that it is now considered a slow-growing TV company. However, despite this, Netflix's stock has seen a significant rally, increasing by 62% this year. In comparison, its rival Disney's stock has remained flat.
One reason for Netflix's popularity and stock rally is its profitability. While other streaming companies are burning cash, Netflix generated free cash flow of $1.3 billion in the quarter. However, the article points out that investors typically do not pay a premium for mature companies that generate cash.
The article suggests that investors may be optimistic about Netflix's potential for growth. One immediate opportunity for growth is a crackdown on password-sharing, which has already led to an improvement in subscriber additions. Netflix expects this crackdown to continue impacting revenue growth in the second half of the year. However, the article cautions that this boost in revenue will likely be temporary, as once all the freeloaders have been dealt with, the impact will diminish.
Overall, the article highlights the mixed performance of Netflix, with slow revenue growth but a strong stock rally. It suggests that investors may be betting on Netflix's potential for future growth, although some of the current factors driving growth may be temporary.
The S&P 500 is close to reaching a record high, signaling the upcoming arrival of a new U.S. bull market, and investors should consider buying stocks like Roku and Datadog that have strong growth potential.
Roku has started rolling out a new home screen to all owners, featuring a 4x4 layout with folders for inputs, a continue watching row, and the use of the term "apps" instead of "Roku Channels."
Roku is cutting 10% of its workforce, removing certain content, and implementing other cost-cutting measures in an effort to control expenses and reduce operating expense growth.
Roku's stock surged 12.5% after announcing layoffs and raising its revenue guidance for the third quarter.
Roku's shares rose 3% after announcing layoffs and office space consolidation, while Tesla, Apple, and AMC Entertainment experienced declines in midday trading.
The Nasdaq Composite has surged 33% this year, signaling the onset of a new bull market, and two growth stocks, Roku and MercadoLibre, present attractive investment opportunities due to their growth prospects and reasonable valuations.
The $30 Roku Express is one of the best streaming devices for its price, offering affordability and a user-friendly interface with minimal ads, despite its flaws in power and HDMI connectivity.
Roku and cybersecurity expert SentinelOne are both deeply discounted stocks with strong business prospects, making them attractive investment opportunities in the current market.
