There are few businesses which have taken care of investors the way in which Netflix (NASDAQ: NFLX) has. Because the company’s initial public offering in 2002, shares have skyrocketed, rising 80,080% (as of March 19). Because of this should you invested a small sum of just $1,250 back then, you can be sitting on a seven-figure balance today from this single investment. That is an unbelievable consequence.
Netflix’s market cap today exceeds $400 billion. However the business is unquestionably still on the radar for a lot of investors seeking to put some money to work over the long haul.
In case you buy this top streaming stock today, can it show you how to retire as a millionaire? I think it is important to learn what makes this company special before deciding if it needs to be in your portfolio.
Investors need to know the corporate’s scale. Netflix raked in $39 billion in revenue in 2024. That was up 16% yr over yr and 609% higher than a decade ago.
It counted 302 million subscribers as of Dec. 31. Again, this key metric has increased rapidly over time. At the top of 2014, there have been 57 million customers.
Perhaps no factor has contributed more to Netflix’s impressive ascent than its first-mover advantage. It was in a position to gain members and grow revenue rapidly since it was primarily competing against traditional cable TV and providing a superior experience. After all, the competitive landscape has shifted, but the corporate remains to be within the lead.
And it is easy to be optimistic. In keeping with data from Nielsen, the streaming platform represented 8.2% of day by day TV viewing time within the U.S. in February, behind only YouTube. Engagement will remain strong, especially with recent seasons of incredibly popular shows Squid Game, Wednesday, and Stranger Things coming out in 2025.
The corporate’s monster success within the streaming industry has change into more apparent up to now few years, particularly as competing services have entered the market in an try to gain customers and scale up. This could not be more obvious once you take a look at profitability, something Netflix excels at as of late.
It has such a big revenue and subscriber base that its bottom line has exploded. The corporate’s operating margin went from 13% in 2019 to 27% last yr, with executives targeting 29% in 2025. Its scalability is showing up right before our eyes.
The corporate operates a fixed-cost business model; serving every additional user has minimal marginal costs, as is often the case with digital services. In theory, content costs need not grow yr to yr, at the least in lockstep with sales gains. So, by adding more subscribers and increasing revenue, earnings have soared. This trend has also been supported by occasional price hikes.