Is Netflix Stock Outperforming the Nasdaq?

Netflix, Inc. (NFLX), headquartered in Los Gatos, California, operates as a subscription streaming service and production company, offering entertainment services in approximately 190 countries. Valued at $513.4 billion by market cap, the company offers a wide range of TV series, documentaries, feature films, and games across different genres and languages.

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and NFLX definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the entertainment industry. NFLX’s strong brand, extensive content library, and commitment to original productions, including award-winning films and series, set it apart from competitors. The platform has garnered critical acclaim, with its original productions winning an impressive 30 Emmy awards in 2024.

Despite its notable strength, NFLX slipped 9.9% from its 52-week high of $1,341.15, achieved on Jun. 30. Over the past three months, NFLX stock gained 2% underperforming the Nasdaq Composite’s ($NASX) 11.9% gains during the same time frame.

In the longer term, shares of NFLX rose 35.6% on a YTD basis and climbed 76.7% over the past 52 weeks, considerably outperforming NASX’s YTD gains of 11.1% and 22.2% returns over the last year.

To confirm the bullish trend, NFLX has been consistently trading above its 200-day moving average over the past year. However, the stock is trading below its 50-day moving average since late July, with slight fluctuations. 

Netflix's outperformance is driven by strong membership growth, higher subscription prices, and rising ad revenues. The company's ad-supported offerings and AI-powered recommendations are key growth drivers, with expectations to double ad revenues in 2025.

On Jul. 17, NFLX reported its Q2 results, and its shares closed down more than 5% in the following trading session. Its EPS of $7.19 topped Wall Street expectations of $7.07. The company’s revenue was $11.08 billion, missing Wall Street forecasts of $11.09 billion. The company expects full-year revenue in the range of $44.8 billion to $45.2 billion.

NFLX’s rival, Roku, Inc. (ROKU) shares lagged behind the stock, with a 29.9% gain on a YTD basis and a 44.4% uptick over the past 52 weeks.

Wall Street analysts are moderately bullish on NFLX’s prospects. The stock has a consensus “Moderate Buy” rating from the 47 analysts covering it, and the mean price target of $1,329.42 suggests a potential upside of 10% from current price levels.