Streaming Wars Continue To Expand But Is Netflix Still A Top Contender?
The streaming wars have commenced this month with the launch of Disney Plus and Apple TV+. Many more services are going to be launched over the coming months and the sole purpose of these services is to topple the biggest name in the streaming services, Netflix Inc (NASDAQ:NFLX). The streaming giant has had a hard time this year, due to disappointing subscriber growth.
The emergence of competition at such a juncture has further made life difficult for the company. The stock is trading at its lowest point this year and it is interesting to figure out whether the Netflix stock is a buy.
One thing that needs to point out with regards to the stock is that some experts would call the current valuations a bit over the top. The stock is trading at 20 times the book value and 99 times its trailing earnings.
Moreover, some analysts also believe that competitors are definitely going to eat into subscriber growth to some extent as well. However, the company’s CEO Reed Hastings has a completely different view on the competition. That could challenge Netflix.
He has actually welcomed the competition. He also said that the emergence of so many streaming options is going to lead to even more cord-cutting. In other words, more customers are going to subscribe to streaming services and opt-out of satellite and cable. If that is the case then Netflix should continue to thrive even after the emergence of tough competition.
While there are legitimate reasons for the gloomy outlook from many analysts, it is also true that the very nature of consuming entertainment is changing. In the long run, could Netflix be able to grow?