4. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 95
Netflix, Inc. (NASDAQ:NFLX) is a Los Gatos, California-based streaming platform that is entering the digital advertising industry as early as next year by offering an ad-based streaming platform to its customers. Previously, the company relied on the subscriber model without any advertisement to build its business.
On September 28, Hamilton Faber at Atlantic Equities upgraded Netflix, Inc. (NASDAQ:NFLX) stock from a Neutral to an Overweight rating and also increased the target price from $211 to $283. The analyst believes that the launch of the ad-based model could be extremely beneficial for the streaming giant in its next growth phase. Faber expects Netflix, Inc. (NASDAQ:NFLX) to generate an average revenue of $26 per month from every customer through advertising. Netflix, Inc. (NASDAQ:NFLX) can be expected to add $6.7 billion to its top line in the next three years. The company’s expansion plans make it one of the best long-term stocks to hold.
Oakmark Funds also shared a positive outlook on Netflix, Inc. (NASDAQ:NFLX) in its Q3 2022 investor letter:
“Netflix, Inc. (NASDAQ:NFLX) (U.S.), a subscription streaming service and production company, was a top contributor for the quarter. Netflix’s share price reacted positively in response to second-quarter results that were strong, in our assessment, and largely better than investors expected. Although the company lost roughly one million global streaming subscribers, the loss was only about half of what management projected. Revenue in constant currency, excluding foreign currency impacts, rose 13% year-over-year, and management is projecting that third-quarter revenue will rise by 12% in constant currency. While currency exchange rates also affected earnings, margins are tracking slightly ahead of prior guidance when adjusted for currency impacts. Importantly, viewer engagement, which we see as a key metric, remains strong. In the U.S., Netflix had as much viewing time in the 2021-22 season as the top two cable networks combined (CBS and NBC), and total share of TV time reached a record in June, according to Nielsen. Along with the earnings release, management stated that the company is making progress on its advertising and password-sharing initiatives. Cash content costs for the next two to three years are expected to be unchanged at roughly $17 billion as Netflix continues to invest in high-quality content creation. Management is forecasting the net addition of one million global streaming subscribers in the third quarter, and we remain pleased with the company’s fundamental performance.”
As of Q2 2022, Netflix, Inc. (NASDAQ:NFLX) was held by 95 hedge funds.
