Netflix was the best-performing stock of the past decade — but will the momentum continue?
Netflix faced a lot of scrutiny in 2019. For the first time, the streaming giant dealt with a significant amount of competition as companies like Disney and Apple released streaming services.
The “streaming wars” became a frequent topic of conversation as analysts debated whether Netflix can withstand the competition. As a result, the company’s shares encountered a lot of highs and lows over the past year.
Recently, CNBC reported that Netflix was the top-performing stock of the past decade. From 2010 to the end of 2019, the stock rose more than 4,000%, beating out every other stock in the S&P 500.
But will this same momentum carry into the coming decade? Here are three things to expect from Netflix in 2020.
1. The company’s subscriber base should increase
Netflix investors became very concerned when the company lost subscribers during the second quarter of 2019. Fortunately, the company was able to make up for this misstep and exceed its third-quarter guidance.
During the first three quarters of 2019, Netflix was able to add 19.1 million new subscribers. The company is scheduled to release its fourth-quarter earnings report on Jan. 21.
This earnings report will be very telling since both Disney and Apple launched their streaming services during the fourth quarter. But Netflix’s subscriber growth will likely continue into 2020.
2. Netflix will continue to expand globally
One of the biggest growth opportunities for Netflix is the possibility of continuing to expand globally. The company’s growth in international markets is outpacing its growth in the U.S.
Company management has stated that it plans to focus on expanding its non-English original content. This should help Netflix continue to grow its international reach.
3. Disney won’t be as big of a problem as analysts anticipated
Most likely, Disney won’t be nearly as big of a problem for Netflix as some analysts predicted. Not because Disney’s service won’t be successful — it will be. 10 million new members signed up for Disney+ on the first day it launched, and this growth will continue into 2020.
But the assumption that Netflix subscribers will leave the service for Disney is flawed. Roughly 80% of Disney+ subscribers also have a Netflix account.
Overall, Netflix is considered a moderate buy on Wall Street with a potential upside of more than 13%. It doesn’t seem like the growth story is over for Netflix just yet.