Is Netflix a Must-Buy Tech Stock Down 10% from Its Highs?

Core Viewpoint - Netflix has demonstrated significant stock performance, climbing 400% from its 2022 lows and 75% over the past year, outperforming the tech sector's 30% growth [1][12]. User Growth and Revenue - Netflix has successfully expanded its user base, adding 22.5 million paid subscribers in the first three quarters of 2024, achieving an average year-over-year growth of 16% to reach 282.72 million subscribers [4]. - The company reported that over 50% of new sign-ups are for its ad-supported plans, which have reached 70 million global users since their launch [3][4]. Financial Performance - In Q3, Netflix achieved a record-high operating margin of 30% and increased its operating profit by 52% year-over-year to $2.9 billion [9]. - The company expects its revenue to grow by 15$43.71 billion, which is an increase of $10 billion compared to 2023 [9]. Competitive Positioning - Netflix's ad-supported subscription plan is priced at$6.99 per month, lower than Disney's $9.99 plan, allowing it to maintain a competitive edge [5]. - The company has expanded into live sports and reality TV, which has contributed to subscriber retention and growth [7]. Stock Performance and Valuation - Over the past decade, Netflix shares have surged 1,660%, significantly outperforming the tech sector [12]. - Currently, Netflix trades at over a 90% discount to its 10-year highs and 42% below its 10-year median forward earnings [13]. Future Outlook - Starting in Q1 2025, Netflix will cease providing subscriber numbers, focusing instead on earnings and other financial metrics [14][17]. - There is speculation about a potential stock split in the future [18].