Stocks for Netflix Inc. (NASDAQ: NFLX) doubled in the first six months of the year, and it is difficult to justify buying its stock after this increase. However, analysts have been saying that Netflix has officially become the “New King of Media” with the exception of its stock.
According to Nat Schindler, an analyst at Bank of America, even if Netflix obtains traditional international puncturing levels, its stock could have big additional upside in the long term. “We think Netflix can become the dominant streaming payer in virtually all markets given its content scale, despite varying levels of competition, regulation and economic conditions in each market,” said Mr. Schindler
Bank of America predicts that Netflix will reach 360 Million global subscribers by 2030, which is about 54% of the total number of global pay TV subscribers it predicts for 2021. Of those 360 Million global subscribers, 280 Million will be international while 80 Million will be domestic.
According to Schindler, in order for Netflix to hit this number, it will have to grow its subscriber base at a compound annual rate of 8% over the next 13 years. He expects Netflix to average a 6% compound annual growth rate (CAGR) in the near future. As competition in the streaming video market is heating up, Schindler claims that Netflix’s unique library of original content separates its service from competitors and will help to protect its market share over time. A strong library of original content also adds to Netflix’s pricing power, which is a key component of its long-term earnings growth path.