Netflix (NFLX) stock is notoriously volatile. And while some nimble traders have surely used NFLX's gut-wrenching swings to their advantage over the years, plenty of punters with less fortunate timing have just as assuredly had their faces ripped off.
Netflix's truly long-timeshareholders are in another class entirely. Those who bought stock in the streaming media giant two decades ago – and then held and held and held through NFLX's many vertiginous ups and downs – have enjoyed outstanding returns vs the broader market.
Alas, these same patient investors who have done so well over the years can still relate to damaged day traders. For even they have seen a good chunk of their wealth evaporate on paper since late 2021.
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That's because as successful as Netflix has been – and may continue to be – it remains at its core a fundamentally insecure business model. (Just look at NFLX stock'svolatility for proof.)
On the plus side, Netflix is the king of on-demand streaming entertainment, serving TV series, films and games via 260 million paid memberships in more than 190 countries. It furthermore lays claim to arguably the best brand in the industry.
On the downside, Wall Street puts relentless pressure on the company to grow its subscriber base. As a consequence, Netflix must spend tens of billions of dollars on content to attract and retain viewers. Competition from the likes of Walt Disney (DIS), Apple (AAPL), Paramount (PARA), Amazon.com (AMZN) and others have forced Netflix to splurge on efforts to acquire, license and produce content over the past several years.
After peaking at $17.7 billion in 2021 – a whopping 50% increase vs the previous year – Netflix managed to cut spending on content. The company spent about $13 billion on content in 2023, and plans to cough up roughly $17 billion for programming in 2024.
Investors are very much counting on the company to keep a lid on that cash burn going forward. But it's going to be hard.
After all, nothing hurts NFLX stock like losing subscribers. Recall that in April 2022, shares plunged after Netflix reported its first loss of subscribers in more than a decade. The company shed in excess of $50 billion in market value overnight.
It's also worth recalling that Netflix stock was already in a steep decline at that point. Sluggish subscriber growth and rising costs had long knocked it off its perch. Indeed, shares hit an all-time closing high of $691.69 back in November 2021.
Note well that NFLX stock still trades about 13% below that level.
The bottom line on Netflix stock?
(Image credit: YCharts)
Which brings us to what you would have today if you had invested $1,000 in Netflix stock 20 years ago.
First things first, however: if you purchased $1,000 worth of NFLX stock in early November 2003 and sold it at its November 2021 peak, you would have grossed nearly $158,000.
However, as noted, things have turned south since then. Check out the above chart and you'll see that if you invested $1,000 in NFLX stock 20 years ago – and did not sell at the peak – today you would be sitting on not quite $139,000.
That's still a terrific return, of course. For comparison's sake, $1,000 invested in the over the same time frame would theoretically be worth a little more than $6,800 today. (The broader market's return includes dividends, which Netflix doesn't pay.)
The good news is NFLX stock has clobbered the broader market over the long term, generating an annualized total return of 33.1% over the past 20 years, vs 10.4% for the S&P 500.
The less good news is that Netflix stock remains below its all-time high – and it could take a while to get back to that level.
The Street's consensus recommendation on this communication services stock comes to Buy, but with fairly mixed conviction. Of the 48 analysts issuing opinions on NFLX surveyed byS&P Global Market Intelligence, 23 rate it at Strong Buy, six say Buy and 16 call it a Hold. Two analysts rate it at Sell, while one says it's a Strong Sell.
Patient investors have done exceedingly well sticking by Netflix stock thus far. Unfortunately, it looks like they're going to have to wait quite a bit longer to recover what their brokerage statements said they once had.
More Stocks of the Past 20 Years
If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today
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However, as noted, things have turned south since then. Check out the above chart and you'll see that if you invested $1,000 in NFLX stock 20 years ago – and did not sell at the peak – today you would be sitting on not quite $139,000. That's still a terrific return, of course.
So, if you had invested in Netflix ten years ago, you're likely feeling pretty good about your investment today. A $1000 investment made in March 2014 would be worth $9,728.72, or a gain of 872.87%, as of March 4, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
You would have more than doubled your money, with a total investment worth of $2,029.55. That's a 103% return, or a 7.23% annual rate of return. Interestingly, despite co*ke's dominance on the world stage, investing in co*ke's main rival, Pepsi, 10 years ago would have given you more pop for your buck.
Over the past decade, you would have done even better, as the S&P 500 posted an average annual return of a whopping 12.68%. Here's how much your account balance would be now if you were invested over the past 10 years: $1,000 would grow to $3,300. $5,000 would grow to $16,498.
With its 2-star rating, we believe Netflix's stock is overvalued compared with our long-term fair value estimate of $440, which implies a multiple of 24 times our 2024 earnings per share forecast.
The stock's total value must multiply by nearly 5 before reaching a $1 trillion market cap -- an ambitious goal that calls for time and patience. A more reasonable, yet consistently market-beating, estimate suggests Netflix could reach a $564 million market cap by 2030 and $1 trillion in 2035.
If you had put $1,000 in Microsoft five years ago, your investment would have more than tripled in value to $3,408 as of Nov. 9. If you had invested $1,000 in Microsoft 10 years ago, it would have soared in value by more than 854% to $11,400 as of Nov.
If you invested $10,000 with founder Elon Musk 10 years ago, your stake would be worth $2.1 million now. That works out to a more than 70% average annual return. The same $10,000 put into the S&P 500 during that time grew just 274% to $37,376. That's just 14% compounded annually.
According to the latest long-term forecast, Coca-Cola price will hit $70 by the end of 2025 and then $80 by the end of 2027. Coca-Cola will rise to $90 within the year of 2028, $100 in 2029, $110 in 2030 and $125 in 2033.
Some of the highest dividend paying stocks in India are Vedanta Ltd., Hindustan Zinc Ltd, Coal India Ltd, T.V.Today Network Ltd, Bhansali Engineering Polymers Ltd, Balmer Lawrie Investment Ltd, Coal India Ltd.
This means that your $1,000 10 years ago — technically, $1,002 — would have bought 60 shares of Tesla. As of Mar. 3, 2024, those 60 shares of Tesla would be worth $12,158.40. That marks a 28.342% annual rate of return.
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
If you had invested in Netflix ten years ago, you're probably feeling pretty good about your investment today. According to our calculations, a $1000 investment made in February 2014 would be worth $9,138.15, or a gain of 813.81%, as of February 12, 2024, and this return excludes dividends but includes price increases.
Netflix hit its record high of 700.99 back in November 2021. Netflix stock has an IBD Relative Strength Rating of 91 out of 99. The rating shows how a stock's price performance stacks up against all other stocks over the last 52 weeks. It has a best-possible IBD Composite Rating of 99.
Wall Street rates both Netflix and Disney stock as a "moderate buy." In terms of valuation, Netflix trades at 35 times forward 2025 earnings, compared to Disney's forward price-to-earnings multiple of 24x. While Disney's stock is cheaper, analysts also expect Netflix to grow faster over the next two years.
Netflix posted its first profit in 2003, earning $6.5 million on revenues of $272 million; by 2004, profit had increased to $49 million on over $500 million in revenues. In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.
Microsoft's return is even more impressive than Apple's, as it turned $1,000 invested in its 1986 IPO to $4.1 million now. However, Microsoft's stock ride was rather bumpy, as its stock turned $1,000 into nearly $600,0000 by the turn of the century.
The good news is NFLX stock has clobbered the broader market over the long term, generating an annualized total return of 33.1% over the past 20 years, vs 10.4% for the S&P 500. The less good news is that Netflix stock remains below its all-time high – and it could take a while to get back to that level.
Introduction: My name is The Hon. Margery Christiansen, I am a bright, adorable, precious, inexpensive, gorgeous, comfortable, happy person who loves writing and wants to share my knowledge and understanding with you.
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