Buy Signal on Netflix (NFLX-US)
Netflix is a $ 261.4 Bn market cap which engaged in providing a subscription streaming entertainment service. The Company has paid streaming memberships in over 190 countries and it allows members to watch a variety of television (TV) series, documentaries and feature films across a wide variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any Internet-connected screen. Members can play, pause and resume watching, without commercials. It offers a variety of streaming membership plans, the price of which varies by country and the features of the plan. Pricing on its plans ranges from $3 to $23 per month. Members can watch content from Netflix through any Internet-connected device that offers the Netflix application, including smart TVs, game consoles, streaming media players, set-top boxes, smartphones and tablets. The Company acquires, licenses and produces content, including original programing.
Increasing competition is one of the major threats that can ruin the company’s future prospects. Netflix will face significant organic competition from various major players such as Apple, Amazon Prime, Disney in recent years.
The on-demand video streaming services launched by these players had seen growth rates similar to those Netflix saw when it started out. Consumers now have a plethora of content from which to choose. With increased competition, Netflix would find it difficult to hike the prices. Moreover, Netflix is primarily a video streaming company. The different divisions of its business do not have the ability to generate revenue. However, most of its rivals, such as Amazon, Disney, and Apple have other segments which can provide cash to help them keep subscription charges lower.
Netflix announced on July 20 that it would be entering the video game market. It intends to start with mobile video games and move forward from there. The company had long considered gaming as one of its major competitors.
Short term catalyst : competition, diversification in video games.
This signal looks consistent with the US Technology sector in Major Bullish Trend.