Netflix Stock: Should You Buy, Hold or Sell? 

İstanbul, Turkey - July 1 2018: Woman using tablet computer and looking an online streaming platform.
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As we’ve collectively navigated the COVID-19 pandemic, we’ve sought comfort wherever we could find it — and we’ve found a lot of it on Netflix. As people went into lockdown in the first quarter of 2020, the digital streaming service added 16 million new subscribers. Netflix’s stock price surged 27% over a 12-month period.

More than a year later, investors have reason to wonder if Netflix will remain a growth story?

A Market Leader, but Still on the Rise

It would probably have been unrealistic to expect Netflix to top the growth it saw in early 2020. Although the company added four million new subscribers in the first quarter of 2021, it landed at 208 million total subscribers — two million shy of its goal. Netflix’s first quarter revenue was $7.16 billion, an increase of 24.2% compared to the first quarter of the previous year. Overall revenue reached about $25 billion in 2020. At present, its market cap, or estimated value, is somewhere between $166.71 billion and $242.63 billion.

Google’s stock price as of Jun. 28, 2021.

netflix stock price june 2021

An Intensifying Competitive Climate

Four million new subscribers in the first quarter seems like good news, but some industry analyses have noted that Netflix could be losing some of its foothold in the streaming marketplace.

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A recent report revealed that in the first quarter of 2021, Netflix’s market share for streaming of original digital content sat at about 50% compared to 64.6% two years ago. In the U.S., the company fell below 50% for the first time. Another industry study showed Netflix’s share of U.S. subscribers down 31% in one year.

That shift is likely due to the growing competition in the digital streaming space as rivals like Disney+, Paramount+, NBC Universal’s Peacock, WarnerMedia’s HBO Max, Discovery+ and possibly even Roku roll out new offerings and challenge Netflix’s lead.

Netflix Stock: Newly Vulnerable or Historically Volatile?

After Netflix released its first-quarter earnings, its stock price tumbled by 11%, to $489.28. It has since enjoyed a rebound that restored it to a trading price of more than $500 per share.

Analysts have noted that Netflix stock has been somewhat volatile over time. In the decade leading to a 2018 analysis, Netflix stock was noted to have dropped at least 10% more than 13 times. Five of those drops were more than 15%.

Good To Know

Although Netflix has been slowed down by production delays related to COVID-19, it plans to spend more than $17 billion on content in 2021. The company has also inked a deal with Steven Spielberg’s company, Amblin Entertainment, and is believed to have production plans for 60 movies this year.

Netflix won seven Oscars at the 2021 Academy Awards, growing its overall collection to 15. An analysis from Nielsen indicates that Netflix is delivering enough value for its customers to consider a fresh hike in subscription prices.

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Netflix Stock: Buy, Hold, or Sell?

Should you invest in Netflix –green light, proceed with caution–yellow light, or hit the brakes–red light? According to CNN Business, 45 analysts rank Netflix as a buy — in other words, a green light.

Although several competitors aim to challenge Netflix’s dominance, it remains the clear market leader in the rapidly growing digital streaming sector. On top of that, it’s investing in itself, making content bets that are likely to add value for consumers and investors alike.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

About the Author

Kelli Francis is a writer and content strategist. She started her career with a degree in journalism from the University of Oregon and went on to work in some of the industry’s busiest newsrooms, from The Seattle Times to MSN.com, WebMD and Yahoo. In nearly a decade at Yahoo, she worked as an assistant managing editor at Yahoo Finance, specializing in personal finance content; a producer for Yahoo News; and a managing editor on Yahoo’s home page team. A perennial seeker, Kelli is currently expanding her knowledge of all things finance as a student at The American College of Financial Services. She is also the very proud mom of a wonderful and unstoppable 7-year-old with Autism Spectrum Disorder.  

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