Netflix Inc. stock rises Monday, still underperforms market
Shares of Netflix Inc. rose 0.49% as the stock market had a positive trading session, although it underperformed compared to some of its competitors.
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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.
Shares of Netflix Inc. rallied 1.20% on a negative trading day, outperforming its competitors.
Shares of NVIDIA Corp. fell 2.77% as the stock market experienced a poor trading session, with the S&P 500 Index dropping 0.28% and the Dow Jones Industrial Average falling 0.51%.
Shares of International Paper Co. (IP) rose 0.56% on a positive trading session, closing short of its 52-week high.
Shares of Prudential Financial Inc. rose 0.82% to $94.43, as the stock market had a positive trading session, with the S&P 500 and Dow Jones Industrial Average also rising.
Shares of Clorox Co. rose 0.98% as the stock market had a favorable trading session, with the S&P 500 and Dow Jones Industrial Average also experiencing gains.
Shares of VF Corp. rose 1.09% on a favorable trading session, but closed $25.37 below its 52-week high, underperforming compared to its competitors.
Roku's shares rose 3% after announcing layoffs and office space consolidation, while Tesla, Apple, and AMC Entertainment experienced declines in midday trading.
Microsoft Corp. shares slipped 0.20% as the stock market experienced a rough trading session, with the S&P 500 and Dow Jones Industrial Average also falling.
Netflix's stock slid 2.40% as it underperformed compared to some competitors, closing $50.31 short of its 52-week high.
Netflix shares slipped 2% after Chief Financial Officer Spencer Neumann stated that the ongoing Hollywood writers' strike is negatively impacting their business, with Neumann also expressing that the ad-supported streaming option will not boost revenue in the short term and predicting slower growth in operating margins moving forward.
Shares of Microsoft Corp. rose 0.79% as the stock market had a favorable trading session, with the S&P 500 Index rising 0.84% and the Dow Jones Industrial Average rising 0.96%.