Netflix Stock Grows by 62%, Subscriber Base Up by 20.4% in 2020

Streaming media giant Netflix outperformed the stock market in 2020. Marketwatch states that its stock price grew by 62% in the 12-month period.

On January 18, 2021, it was trading at $496.47, up by 46.61% over the trailing one-year period. With the company capitalizing on rising demand worldwide for at-home entertainment, shares were not the only vertical to register growth. Its global subscriber base also grew remarkably and was among the factors driving performance.

According to the research data analyzed and published by Comprar Acciones, as of the third quarter of 2020, it had 195.15 million paid subscribers globally.

The number had grown remarkably from 158.33 million during the corresponding quarter of 2019. It rose to 167.09 million in Q4 2019, 182.86 million in Q1 2020 and 192.95 million in Q2 2020. Overall, it added an impressive 28.3 million during the first three quarters of 2020.

It is worth noting that even prior to the pandemic, the company was reporting rapid growth. For instance, in the period between 2015 and 2019, its revenue nearly tripled. The same period saw the subscriber base grow from 70.8 million to 167.1 million.

Since the start of 2016, Netflix stock has grown at an average annualized rate of 37.5% every year. It was consistently the most popular streaming service worldwide prior to the pandemic based on the number of monthly visits to the subscription video on demand (SVoD) platform. In the months between November 2019 and February 2020, it had an average of 1.06 million visits every month.

The figure shot up to 1.35 million in March 2020. Compared to February 2020, the month of March 2020 saw a 29% uptick in traffic as the pandemic took hold and people stayed home.

 

90% of 2020’s Most Streamed Original Shows Were on Netflix

Based on data from Apptopia, Netflix was the tenth most downloaded app worldwide in 2020 with a total of 223 million downloads. It held the tenth spot in the United States as well, garnering 44.7 million downloads.

Among entertainment apps, it was the most downloaded globally. It sat well ahead of YouTube which was second with 170 million downloads.

Google Play Games was third with 150 million downloads and Amazon Prime Video fourth with 130 million. Disney+ took the fifth spot with 102 million downloads worldwide.

However, in the US, Netflix was the second most downloaded entertainment app with 44.7 million downloads during the year. Disney+ secured top spot with 45.2 million.

Netflix was also the tenth highest grossing app globally, generating $209 million in the same period. Almost half of this amount, $92 million, came from the US, where it was the eighth highest grossing app.

Another highlight for the streaming giant was that its titles accounted for most of the top-ranked streaming shows in 2020. According to data published by Nielsen, Netflix accounted for nine out of the top  10 most streamed original series.

The only exception was The Mandalorian which streamed on Disney+. Moreover, all of the top 10 most streamed acquired series were shown on Netflix.

Disney+, however, excelled in the Movies segment, where it accounted for seven out of the top 10 most streamed titles.

 

Netflix Subscriber Base Grows by 20.4% Year-Over-Year

Analysts are keen to find out how Netflix ended the year 2020. Notably, the streaming giant’s executives warned that the performance posted in H1 2020 was unsustainable. They explained that the growth in subscribers and other verticals was a pull-forward resulting from stay-at-home orders.

Attesting to this was the fact that in the first half of 2020, it added 26 million new paid subscribers, but in Q3 2020, it added only 2.2 million. Comparatively, it had added 6.8 million paid subscribers in Q3 2019.

However, executives predicted that the year would end with 201.15 million subscribers, up by 20.4% from Q4 2019. If it hits the projection, Netflix will have added a record 34 million new users in 2020, above the previous annual record of 29 million reached in 2019.

According to company estimates, the quarter will see a 3.8% increase in earnings per share (EPS) to $1.35 per share. Its revenue is anticipated to grow by 20.2% year-over-year (YoY) to $6.57 billion.

Analysts are more optimistic, projecting an EPS increase of 6.2% to reach $1.38 according to the Zacks Consensus Estimate. Its revenue is forecast to shoot up by 20.8% from Q4 2019 to $6.60 billion.

According to Zacks, the paid subscriber addition for Q4 2020 is projected to be 6.19 million. That would be considerably slower than the 8.76 million that it added in Q4 2019. It is noteworthy though that Netflix underperformed the Zacks Consensus Estimate in three of the four previous quarters.

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Sobre Nica San Juan PRO INVESTOR

Nica is a BA Political Science graduate, startup founder and financial expert. She has an entrepreneurial spirit and started several startups from a young age, eventually becoming fascinated with stocks, cryptocurrencies and the blockchain economy. She specializes in financial tech and her expertise is in writing detailed tutorials and guides on how to invest in stocks and cryptocurrencies.

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