Whether you’re a veteran or an absolute stock trading beginner, you must have heard the story about how Blockbuster missed an opportunity to partner up with Netflix. Whoever was in charge at Blockbuster at the time probably wasn’t happy watching Netflix stocks rise from $1.20 to over $500 since 2002. However, if you do your research, you can avoid making that kind of a blunder.
In this article, we’ll show you how to buy Netflix stock online and provide you with information about the company itself. That should help you decide if Netflix fits your financial profile. Some of the topics we’ve covered include:
- A brief history of Netflix
- Netflix stock history and performance
- Different ways of buying Netflix stock
- Answers to frequently asked questions about Netflix
About the Company
Founded in 1997 as a DVD-by-mail service, Netflix (NFLX) developed into a leader in the video streaming market. Its increased popularity has affected the NFLX stock. It has skyrocketed since becoming public at an IPO of $15 back in 2002.
Due to heavy investments in content needed to keep the company profitable, Netflix does not pay dividends to its shareholders. This hasn’t changed since Netflix’s peak performance years (2016–2018).
The current saturation on the streaming service market signals that investing in Netflix probably isn’t a good idea at the moment. However, if we have learned anything so far, it’s that Netflix finds a way to overcome adversity and come out on top.
Should I Buy Netflix Stock?
So, let’s see why investing in Netflix stocks is (or isn’t) a good idea. We’ll provide some data analyses and try to give you a Netflix stock forecast based on that.
Before we jump to the details, it’s definitely worth mentioning that Netflix stock trends are tightly connected to the increase in its customer base, and the success of movies and TV shows it airs. While Netflix stock performance was excellent in 2020, mostly due to the stay-at-home trend, Netflix shares have stagnated since the “peak pandemic” period.
Netflix stock performance
We should note that Netflix stock predictions are based mostly (almost exclusively) on the number of new subscribers and if that number matches or surpasses Wall Street’s predictions.
On a 52-week basis, Netflix profits jumped over 139%, with a 24% increase in sales. However, 2021 has not been particularly stellar so far. The year started strong, with stock prices jumping as high as $590 per share in January 2021. This period was very short-lived, and Netflix stock price recorded a steady decline and stagnation at approximately $490 in June 2021.
According to Netflix revenue statistics, the streaming giant had only 3.98 million new subscribers in the first quarter of 2021, while Wall Street predictions called for over seven million. This caused Netflix stocks to fall by as much as 7.4%. As a result, Netflix has set the bar low for itself in the second quarter, predicting only one million new subscribers. However, some analysts predict over four million due to announced improvement in programs on offer in the second half of the year.
Netflix stocks in your portfolio
Before you make a definite decision to buy Netflix stock, you should take a good look at your stock portfolio.
Check if you have already invested in stocks of similar companies, and if you have, it may be a good idea to diversify a bit. Even though the tech and entertainment market is very prolific at the moment, it can be very volatile as well. Simply put — avoid putting all your eggs in one basket.
If you don’t have many (or any) entertainment or streaming stocks in your portfolio, Netflix may be your safest bet (according to investors.com). Even though there have been fluctuations, Netflix profit is expected to rise, and with it, the value of its stock. In order to get a better idea of what the market looks like and get ahead with some predictions, you may want to try using a stock screener tool to help you in the beginning.
How to Buy Netflix Stock
Here are some of the most common ways of buying a Netflix stock.
Online trading platforms/brokerages
In 2021 buying stocks through a brokerage may sound a little too “Mad Men,” it really should be the first thing that comes to mind when you’re wondering how to buy Netflix stock. Believe it or not, brokerages are still the most common way of buying stocks. You just need a brokerage account that you can use to trade different stocks. You can instruct your brokerage on when to purchase/sell NFLX stock, depending on factors you set.
Now, there are so many online brokerages and trading platforms that it’s only natural to be suspicious. In case you decide that you want to see what all the fuss is about, here are a few tips to consider before trying them out:
- Perform thorough research and create a list of all available stock trading platforms
- Compare their pros and cons
- Consider your financial capabilities, needs, and options (discounts, fees, etc.)
- Make sure that the chosen platform provides you with all the information you need (e.g. Netflix stock analysis)
If you need more information, you can always check out our trading platform reviews.
The best thing about online brokerages is how easy it is to open an account. However, not all platforms are created equal, and some may be less than honest about their terms and conditions. Make sure to investigate what safety protocols the platform you chose uses and read as many customer reviews as possible about safety issues.
This option is the best for people who want to handle their money on the go but already have some experience. Trading platforms allow for a quick and simple overview of the necessary information.
Hire a financial advisor
This is probably the best option if you are a beginner looking to buy stock in Netflix. Trusting your money to someone with education and previous experience is never a bad idea. They can show you the ropes along the way, and you can switch to trading yourself eventually.
The same precautions as with trading platforms apply. Research the advisor you’ll be hiring to ensure you’re dealing with someone honest and reputable.
So, at the end of the day, we may conclude that investing in Netflix stock is not the riskiest move you could make right now, but don’t expect high returns quickly. Even though the general NFLX forecast is rather optimistic regarding what the second half of the year holds, some expert analyses still consider Netflix stock a “no buy,” as they see a need for a formation of a fresh customer base before the stock is expected to rise again.
Netflix has announced some great new titles (Atypical, Awake, Resident Evil, He-Man, etc.). This should draw in new subscribers, which in turn means possible Netflix stock growth. All these make NFLX a potential blue-chip stock in the future and definitely worth your curiosity and attention.
All in all, we hope that we answered some of your questions and helped you decide whether investing in Netflix is a good idea for you.
Netflix was assessed at around $40 billion.
Netflix went public in 2002. Netflix IPO was just $15 per share at that time.
Netflix does not pay dividends. Even when it went through a period of record growth, this policy didn’t change. Netflix invests significantly in content. This does help the company grow, but it means there’s not enough left for dividends.
Despite a drop in memberships and a large debt, Netflix has managed to net $1.7 billion in the first quarter of 2021. This is more than twice their revenue for the same period last year, which was $700 million.
The Netflix symbol on NASDAQ is NFLX.
Netflix does not offer a direct stock purchase plan. However, it does offer a stock option program for its employees.
You can read more on how to buy Netflix stock in our guide.