Investment in Netflix Stock Two Decades Ago: A Look at Current Returns
In the realm of stock market performance, Netflix has been a standout over the past two decades, significantly outperforming the S&P 500. This impressive growth is evident in the annualized return of approximately 34.4% for Netflix, compared to the S&P 500's 10.6% during the same period.
A $1,000 investment in Netflix 20 years ago would be worth a staggering $389,000 today, while the same investment in the S&P 500 would amount to around $7,500 (excluding dividends, as Netflix does not pay any).
Netflix's stock price gains have notably surpassed the market average, with consistent strong annual returns, particularly in recent years. Since 2017, Netflix has recorded at least 20% returns in seven of nine years, far outpacing the S&P 500's average annual return of about 10% during that time.
The company's revenue growth has also been robust, averaging nearly 10% over the last three years, compared to about 5.2% for the S&P 500 on average.
In 2025 alone, Netflix stock surged around 38-50%, far surpassing the S&P 500's 5-2% gains for the same period.
Netflix trades at higher valuation multiples versus the broader market, reflecting premium growth expectations by investors.
The company's ambitious plans for the future include spending $16 billion on content in 2024 and $18 billion in 2025. Investors are counting on Netflix to leverage these investments into outsized subscriber growth.
Wall Street puts relentless pressure on Netflix to grow its subscriber base. As for where Netflix goes over the next 12 to 18 months, the Street's consensus recommendation on this communication services stock is highly bullish.
The chart below shows the performance of Netflix stock over the past 20 years.
Netflix is the king of on-demand streaming entertainment, serving TV series, films, and games via 300 million paid memberships in over 30 languages and 190 countries.
However, competition from companies like Walt Disney, Apple, Paramount, Amazon.com, and others has forced Netflix to splurge on efforts to acquire, license, and produce content over the past several years. The details of Netflix's subscriber base, content spending, and language and country availability were not provided in the article.
As of the survey by S&P Global Market Intelligence, 22 analysts rate Netflix at Strong Buy, six say Buy, 16 call it a Hold, and two have it at Sell. This works out to a consensus recommendation of Buy, with solid conviction to boot.
In conclusion, Netflix has been one of the stock market's standout performers over the last two decades, substantially outperforming the S&P 500 in total return and growth, exemplifying the company's transformation into a dominant global streaming and entertainment powerhouse.
- In the financial sphere, investors have shown a strong consensus in favor of buying Netflix stock, as 22 analysts rate it as Strong Buy and six as Buy, despite fierce competition in the on-demand streaming market.
- The trading of Netflix stock demonstrates the premium growth expectations of investors, with high valuation multiples compared to the broader market, highlighting the company's impressive growth in streaming and entertainment, particularly in recent years.
