Netflix (NFLX) shares have dropped close to 18% since it reported Q2 results in July, falling from $418 on July 11 to $316 on August 17. It’s recovered a bit since and is currently trading at $344.44. Despite that volatility, the stock remains a favorite among investors and analysts.
Why investors are bullish
Wall Street wasn’t impressed after Netflix fell short of their Q2 mark of $3.94 billion, falling just short at $3.91 billion. Moreover, Netflix added “just” 5.2 million new subscribers in Q2, compared to 6.2 million projections.
All this sent shares tumbling, even though revenue growth remained sturdy at 40% year-over-year. And more importantly, Netflix beat the $0.79 earnings estimates, posting a reported EPS (earnings per share) of $0.85.
2x growth (and more to come)
Despite the recent sell-off, Netflix stock is trading 109% above its 52-week low of $164.73 — more than a 2x return for investors who have been chillin’ on their NFLX.
Netflix currently has a US subscriber base of 60 million, give or take (100 million total worldwide, per Statista). In Q3, Netflix expects to add 5 million more. So what are Netflix’s key growth drivers to meet that goal?
OCGG: Original content/global growth
Netflix is banking on new content driving more subscribers to the platform. For 2018, Netflix says they’ll be allocating up to $13 billion for original content in 2018.
The thinking behind this strategy is to offer a more localized experience for consumers. For instance, Netflix is trying to gain traction in India with shows like Sacred Games and Ghoul.
To get the global strategy right, Netflix is testing different pricing models across multiple demographics in the cost-conscious Indian market.
Netflix is available for purchase to Indian subscribers at $7.30 per month compared to market leader Hotstar that charges less than $3. A tier based pricing system may be the way forward for Netflix to gain significant international subscribers, especially in emerging markets.
This international strategy could have a significant impact on Netflix’s financial performance and stock price over the short-to-medium term. According to consulting and accounting firm PwC, the US U.S. OTT sector (subscription streaming services) will grow to $30.6 billion by 2022.
Competition from Amazon and Disney
While cord-cutting remains a key driver for Netflix, the streaming giant faces fierce competition from other streaming providers. In this year alone, customers canceling pay-TV subscriptions is expected to rise by 33% this year.
And to follow the “if-you-can’t-beat-’em-join-’em” maxim, plenty of cable companies are now offering streaming services as part of their content packages.
Disney (DIS) is expected to enter the streaming market in 2019. They’ve already made a big investment with their OTT sports franchise ESPN+. Outside of sports, Disney has substantial amounts of quality content it can leverage to gain subscribers.
At the end of the day…
Amazon and Disney have significant resources to compete with Netflix, should they wage an all-out subscription price war. It may not be necessary, however; the average US family subscribe to three streaming services. Which means there may be room for multiple players, at least domestically.
All in all—all factors and volatility considered—the 12-month average price target for Netflix is $377.50, which is still 10% above the current trading price of the company. So despite the ebbs and flows, looks like we can chill on Netflix.
For now, anyway.
How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) 👀
I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.
I’m interviewing a tax expert about how real estate investors avoid paying taxes in perpetuity—AND how everyday citizens can do the same thing.
There’s the 1031 exchange, of course, which I’ve shared with you guys before.
Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREE—as long as said property is worth the same or more.
But there’s ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.
So I thought I’d share it with you guys. 💎
You can check it out here.
Let me know what you think. 😎
PS: In our next update, I’m going to break down how real estate moguls get paid from their properties…tax free. 👀
PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.
How I run a $300M+ business from the beach…(and how you can TOO!)
Yes, you read that right.
If there’s anything the pandemic taught us, it’s that the paradigm of “office” and “workspace” has been shaken to its CORE.
Universities are teaching via Zoom, court dates are done virtually, FULLY REMOTE businesses are valued at $1B+, and legitimate Inc. 5000 startups are run from…wherever. 📲
This is my office for the day…
I am actually running our business from the beach, typing this from here.
It’s 4:28 pm CET, which means it’s 10:28 am EST and I am CRUSHING my to-do list.
(And the team will continue to crush it while I’m asleep. That’s the 🗝)
So how did we get here?
As a result, we shut down our main office and set EVERYTHING up to run remotely…
SMOOTHLY! And a system that allows us to outperform competition by 200%. (You can build this system, too. More on this in a second.)
Here’s what we were able to do since then:
- Gained 6M+ followers across all platforms 📈
- Add 1500+ new apartments to the portfolio 🤑
- Grow to $300M in real estate 🚀
- 105% investor returns 🎉
- 700K+ community members 🤝
And here’s the best part…
Having team members in all the main time zones gives us a 24-hour work cycle vs. 9-5/eight-hour on-the-clock performance.
This means we get 3x the productivity of a similar company. 🔥
Let me repeat that…3x PRODUCTIVITY vs. our competitors.
Meanwhile our project management software grants us 24-hour TEAM-WIDE connectivity that tracks all tasks and lets us know if productivity dips even a little bit.
There is ALWAYS someone senior awake. It could be Martin in Barcelona…Nat in New York…Vineet & Arif in New Delhi.
All the while giving YOU GUYS wealth hacks and daily content. 🔥
OK, so how can you do it?!
Well, the first step is to have an actual side hustle you’re launching. Not just an idea, a validated business.
MAJOR KEY: Do NOT spend money until you’ve made your FIRST DOLLAR! 🗝🗝🗝🗝
(You can catch a replay Business Launch masterclass here and see TRIBE member Nessa launched her business on the spot and got her first $45K client shortly after.)
One of the easiest ways to start is with Airbnb—you can start that in 10 minutes. Literally. (Here’s a guide if you need it.)
Once you have your business, you build a virtual infrastructure (you really just need two softwares, which are FREE), manage the team accordingly and run the business from there.
I’m gonna put together a step-by-step video breakdown this weekend inside the new TRIBE U on the FIVE key things you need to do this for YOURSELF. 💵 💎
From what software to use, how to build a team, how to keep.
In the meantime, drop a comment if you’re ready to build some wealth and any questions if you want more…
Let’s get to work. 🙌
NYCE CEO: Apps Like Robinhood Have A Responsibility To Their Young Investors
Investor and popular Instagram influencer Philip Michael says new fintechs need to take greater responsibility for their younger traders.
“Promoting financial literacy is a must, but encouraging risky gambling is reckless,” Philip Michael, NYCE CEO, says.
In 2020, a 20-year-old Robinhood trader killed himself after engaging in risky options trading and seeing his balance $730,000 in the red, leading to a wrongful death lawsuit against the investment app.
“The main apps onboard as many new users as humanly possible, but there’s really no educational process,” Michael says, “and these first-time investors are left to figure things out on their own.”
NYCE—a fintech focused on creating wealth for minorities—wants to create 100,000 millionaires through real estate investments and wealth education.
Through its app, investors can own shares in apartment complexes for as little as $100.
Since launching, NYCE has set records for most new first-time BIPOC real estate owners, buying over 1500 apartments in the pandemic and splitting ownership with its investor crowd.
Once investors are in, NYCE automatically enrolls investors in an online wealth academy (TRIBE) that teaches basic wealth principles, responsible investing and how to spot irregular fads like altcoins and meme stocks.
“Becoming a millionaire is a function of time and habit, not luck and one-time scores,” Michael says. “The micro-investments are really just the gateway drug to that wealth mindset.”