Netflix stock: buy or sell?
Updated on:
Dec 1st, 2020
2
Netflix stock brief
- Netflix stock skyrocketed 2.83% to close at $504.58 on the stock market on Tuesday.
- The stock is configuring an uptrend pattern since last September, when it bottomed at $458.60. This uptrend marked a 10.03% gain
- Netflix, Inc. provides subscription streaming entertainment service. It offers TV series, documentaries, and feature films across various genres and languages.
Should I buy Netflix stock?
Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best
Is $NFLX stock a buy?
Currently, Netflix stock matches one trading strategy:
Uptrend buy setup
Netflix stock continues to trend higher since last September and marked an amazing 10.03% gain. Price marked a pull back in this uptrend at $463.41 in mid-November, and since then it bounced off a 8.88%. Now, it's just 13.46% away from breaking out over its last top and resume the uptrend. The new buy point is therefore at $572.49. If you decide to enter this trade, the suggested stop loss is at $515.24
| Buy setup | Buy point | Stop loss | Risk |
| Uptrend buy setup | $572.49 | $515.24 | 10.00% |
Should I sell Netflix stock?
When you own a stock with some profit, it's really difficult to decide the best moment to sell and get your benefits. Just as when we have to buy shares, determining when is the best time to sell is not a capricious decision, and we must adhere our own trading strategy. Our trading system selects very simple strategies to guide us on when is the best time to sell our shares. Be aware that these strategies should not be used for selling short Netflix stock
A golden rule is that you should never hold an open trade that produces higher than expected losses upon the buy. The timing to sell shares should always be ruled by the stop-loss (automatic or manual)
Is it time to sell Netflix stock?
Currently, Netflix stock doesn't match any of our preferred sell setups, so if you own Netflix shares and your operation is in profit probably is not time to sell now
Netflix ratings
In the last month, 2 analyst ratings were published for Netflix
| Brokerage firm | Rating |
|---|---|
| Nov 2nd, 2020 | |
| Loop Capital | Neutral |
| Nov 23rd, 2020 | |
| JPMorgan Chase & Co. | |
Netflix stock analysis
Netflix shares started an uptrend last September, and gained a gorgeous 10.03%. The price line shows rising peaks and troughs, and along the way provided very few buying opportunities for those who wanted to invest. Latest pullback was in mid-November, when price bounced at $463.41. Like in all uptrends, price needs to take breath and now price is consolidating the gains in a range between $572.49 and $463.41
SMAs overview
Supports and resistances
The current resistances are:
The current supports are:
Bollinger bands
The price is trading very close to the upper Bollinger band, indicating some level of overbought in recent sessions. This is not a bearish indicator, as price can trade in these levels for many days and weeks
Relative strength index
The has been between the overbought and oversold zones for some weeks, and therefore, without this indicator really being helpful in making any decisions.
Netflix stock price history
Netflix IPO was on May 23rd, 2002 priced at $1.16 per share1. Since then, NFLX stock has risen by 43,398.28%, with an average of 2,411.02% per year. An investment of thousand dollars on the IPO would be valued $434,982.76 today.
1: Adjusted price after possible price splits or reverse-splits
Price target for Netflix stock
Nobody knows how much a stock will be priced tomorrow. However, many stock price predictions are published every day by banks, financial institutions and independent analysts.
Along with buy or sell recommendations, brokerage institutions publish their price estimates based on the stock price action and the company fundamental data. Most of these estimates follow the release of new financial data by the company, and many times. If you are a small trader you shouldn't trade based on these price targets.
The average price target for Netflix stock calculated from the table below is $639.00. Netflix closed at $504.58 on Tuesday, so the target price is expecting an increase by 26.64%.
| Brokerage firm | Price target |
|---|---|
| Nov 2nd, 2020 | |
| Loop Capital | $600.00 → $650.00 |
| Nov 23rd, 2020 | |
| JPMorgan Chase & Co. | $615.00 → $628.00 |
Earnings and financials
Netflix, Inc. ($NFLX) reported quarterly earnings of $1.74 per share last October, far lowering the Wall St consensus estimate of $2.13 per share. This quarterly report represents an earnings surprise of -18.31%. On the contrary, reported sales were $6.4 billion, consistent with analysts' estimates.
Same quarter one year ago, reported EPS was $1.47, so recently reported EPS is a gain of 18.37%. Revenue exploded a 22.70% on an annualized basis in the , from $52.4B to $64.4B last quarter.Netflix ($NFLX) is posting quarterly financial report mid next January. Wall Street predicts of $1.38, compared to Q3 that made $1.74.
Netflix competitors
Netflix is classified inside the Communication Services sector and the Entertainment industry, which contain 28 industry peers.
Netflix main competitors are:
| Company | Market cap | Rating | Bullish ratings1 |
|---|---|---|---|
| Netflix ($NFLX) | $212.3B | Buy | 1 |
| Amazon ($AMZN) | $1.6T | | 4 |
| Disney ($DIS) | $267.5B | Buy | 6 |
| Comcast ($CMCSA) | $225.0B | Neutral | 0 |
| Charter ($CHTR) | $130.0B | Buy | 1 |
| BCE ($BCE) | $38.7B | Neutral | 0 |
| Roku ($ROKU) | $29.0B | Buy | 9 |
| Liberty Broadband ($LBRDA) | $28.1B | Neutral | 0 |
| DISH Network ($DISH) | $16.6B | | 2 |
| Liberty Media Corporation Series A Liber ($BATRA) | $1.2B | Neutral | 0 |
1 In the last 30 days.
Netflix performance
To better understand Netflix performance you must compare its gains with other related stocks in same sector or industry.. For Netflix, the benchmark is made against Amazon, Disney, Comcast, Charter, BCE, Roku, Liberty Broadband, DISH Network and Liberty Media Corporation Series A Liber.
| Company | 1m | 3m | 6m |
|---|---|---|---|
| Netflix ($NFLX) | 5.40% | -8.90% | 19.50% |
| Amazon ($AMZN) | 5.20% | -9.20% | 30.00% |
| Disney ($DIS) | 22.30% | 11.80% | 22.50% |
| Comcast ($CMCSA) | 19.30% | 13.80% | 25.90% |
| Charter ($CHTR) | 9.40% | 7.30% | 21.60% |
| BCE ($BCE) | 7.40% | 2.40% | 3.90% |
| Roku ($ROKU) | 35.20% | 65.90% | 164.50% |
| Liberty Broadband ($LBRDA) | 16.10% | 13.90% | 15.30% |
| DISH Network ($DISH) | 41.90% | 2.20% | 9.00% |
| Liberty Media Corporation Series A Liber ($BATRA) | 21.40% | 29.10% | 11.30% |
Important:
The comments expressed in this article are personal and should not be followed as recommendations for you to buy or sell shares. The author of this text does not know the individual conditions of the reader, his or her own financial statements or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Thoughts are expressed for general educational purposes onlyNetflix summary
| Tuesday, December 1st, 2020 | |
|---|---|
| Open | $492.34 |
| Close | $504.58 |
| Day range | $491.98 - $509.45 |
| Previous close | $490.7 |
| Session gain | 2.83% |
| Average true range | $12.35 |
| 50d mov avg | $499.67 |
| 100d mov avg | $499.25 |
| 200d mov avg | $454.59 |
| Earnings date | January 19th, 2021 |