After a year of ups and downs, the Netflix (NASDAQ: NFLX) stock price ended 9.23% higher yesterday, January 10, than it was on January 12, 2021. However, a recent pull-back has gripped the stock ever since it hit its 2021 peak on November 17. On top of that, the recent weakness in the tech sector has been an added pressure on the stock.
However, this dip can be considered as a good buying opportunity, as believed by 23 of the 30 Wall Street analysts covering the stock. Nonetheless, due to 4 of the analysts having a Hold rating and 3 of them having a Sell rating on Netflix, the stock is currently a Moderate Buy on average.
Major Plus Points
The streaming pioneer has managed to maintain its dominant position in the video-streaming domain, even with the entry of strong new rivals. A compelling content portfolio and focus on content localization is strongly taking on services like Amazon Prime Video (AMZN), Disney+ (DIS), and Apple TV+ (AAPL).
Interestingly, Netflix also seems to have its eyes set on the technological future — the metaverse. Last year, the company hired Mike Verdu as its Vice-President of Game Development. This was important because Verdu is a well-known gaming innovator who worked earlier in the Electronic Arts and Facebook’s Oculus division. He had a major hand in bringing metaverse to the forefront.
As video gaming is expected to be a big attraction of the metaverse, this hiring move was highlighted in the tech and media space; especially after acquiring various small video-game developers. These subtle steps lead me to believe that Netflix is laying the foundation to compete with the top metaverse stocks.
Expert Weighs In
Monness Crespi Hardt analyst Brian White believes that the unexpectedly large volume of original content released by Netflix in 4Q21 should encourage strong user engagement in its upcoming earnings. Moreover, the carry-over impact of the Squid Game, which was launched in 3Q21, is also expected to be a positive. Furthermore, the acquisition announcement of visual effects company Scanline VFX, and the launch of its mobile gaming service in the 4Q21 gives White more hope.
For the fourth quarter, White expects revenues of $7.742 billion, which translates to 17% year-over-year growth. His projection for earnings per share stands at $0.90.
The analyst reiterated a Buy rating on Netflix with a price target of $730. He was not much concerned about the inconsistent subscriber growth and is encouraged by the higher number of consumers added to the platform throughout the last year, strong content, and immense room for growth in the forthcoming years.
The Netflix stock projections given by the Wall Street analyst consensus suggest an average price of $671.79.
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