Investors seeking thriving opportunities have turned their gaze towards the communication services sector, which boasts a remarkable 15.32% surge year-to-date within the S&P 500. Notably, three standout stocks have been amplifying shareholder value, setting the stage for further market conquests.
Meta Platforms (META)
The story of Meta Platforms (NASDAQ:META) is a tale of unbridled success, with a whopping year-to-date increase of 41% and a staggering 144% surge over the last year. This metamorphosis evokes memories of a phoenix rising from the ashes, dominating the sector with a flair that captivates market observers worldwide.
Walt Disney (DIS)
They said it couldn’t be done, but Walt Disney (NYSE:DIS) defied the odds, reclaiming its throne as a top contender in the market arena. With a remarkable 35% year-to-date surge and a persistent 29% increase over the past year, Disney’s magical touch continues to mesmerize investors and critics alike.
Netflix (NFLX)
The riveting saga of Netflix unfurls with intrigue, crafting a narrative that keeps audiences on the edge of their seats. As one of the key players in the communication services realm, Netflix’s performance heralds a tale of resilience and adaptation, echoing the sentiments of a modern-day hero fighting against all odds for supremacy in the entertainment domain.
The Rising Star: Netflix (NFLX) Shines with Impressive Fiscal Growth
Netflix’s Strong Performance in the Industry
Netflix (NASDAQ:NFLX) stands tall as the third-best performer among the 22 companies in the sector with its shares soaring by 30% year-to-date and a remarkable 88% growth over the past year.
Impressive Milestones in 2023
Despite the relentless competition in the streaming services space, Netflix achieved a grand feat in 2023. The company ended the year with a staggering 260.28 million global paid memberships, marking a substantial 12.8% increase from 2022, setting a new company record.
Financial Success and Future Projections
Boasting a strong 21% operating margin in 2023 – a 300 basis points surge from the previous year and 100 basis points higher than management’s expectations – Netflix has been strategically working towards maximizing its ad business and expanding the paid sharing of its members. The company harbors ambitions to reach 500 million connected TV households in the future.
Going forward to 2024, Netflix anticipates achieving a 24% operating margin, surpassing its prior guidance of 22.5% at the midpoint. This advancement is poised to drive an increase in free cash flow. Additionally, the company foresees double-digit revenue growth in 2024, excluding currency fluctuations, with advertising playing a pivotal role in revenue acceleration beyond 2025.
Moving Towards Revenue Diversification
“While establishing ourselves in new areas like advertising and games, we believe we have a lot more room to grow,” the company articulated in its 2023 shareholder letter.
“It’s a $600B+ revenue market opportunity across pay TV, film, games, and branded advertising. Currently, Netflix commands only about 5% of this expansive market. Moreover, our share of TV viewing remains below 10% in every nation.”
Although Netflix’s stock may not come cheap, it is unequivocally a price worth paying for the pinnacle of excellence in the entertainment business.
On the date of publication, Will Ashworth did not have any positions in the securities mentioned in this article. The views expressed in this article adhere to the InvestorPlace.com Publishing Guidelines.
