The market is dominated by investor sentiment. Fundamentals only matter as long as the market decides that they matter. For example, many tech stocks were loss-making in 2021, yet their share prices rocketed to stratospheric levels.
This year, investors decided that Netflix should be ‘cash flow positive’ and punished it for a loss in subscribers and not taking drastic action earlier. Investors are also spooked by the increased competition and a potential slowdown in consumer spending.
However, things have stabilised somewhat. Netflix’s top-line revenue by quarters did not crater. P&L continues to hum along. After such a drastic fall in share price, Netflix was oversold. Plus, Netflix is starting to introduce ads in its programs. This may increase income over time.
At the moment, the $140 billion company is neither overvalued (like it was back in 2021) nor undervalued.
Source: Netflix Inc
Jackson is a core part of the editorial team at GoodMoneyGuide.com.
With over 15 years industry experience as a financial analyst, he brings a wealth of knowledge and expertise to our content and readers.
Previously Jackson was the director of Stockcube Research as Head of Investors Intelligence. This pivotal role involved providing market timing advice and research to some of the world’s largest institutions and hedge funds.
Jackson brings a huge amount of expertise in areas as diverse as global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University and has authored nearly 200 articles for GoodMoneyGuide.com.
