Shares of Netflix (NFLX -3.33%) rose 38.6% in the first half of 2024, according to data from S&P Global Market Intelligence. The media-streaming veteran anchored its gains around two robust earnings reports, and the company signed potentially game-changing deals with two popular sports leagues along the way.
Netflix's financial results and a deal-making spree
Let's start with the financial reports.
A powerful fourth-quarter report inspired a strong price jump in January, while an equally impressive showing in April led to a sharp price drop instead. Investors shrugged off analyst-stumping Q1 results to focus on a modest full-year revenue forecast and the end of subscriber addition reports. But analysts helped the skeptics digest Netflix's healthy cash flows and earnings over the next couple of weeks, erasing the drop in a flurry of bullish research notes.
That's far from the whole story, of course. Among many other price-boosting events, Netflix took some serious steps into the live sports market.
Building on the success of behind-the-scenes documentary series such as Formula 1: Drive to Survive and Break Point, the company signed a long-term live broadcast deal with the World Wrestling Entertainment group in January. WWE, a part of the TKO Group Holdings sports-brand portfolio, will use Netflix to stream its content starting in 2025.
Four months later, the National Football League agreed to stream live NFL games on Netflix on the next three Christmas Days. The schedule starts with two games this December, matching the Chiefs with the Steelers, while the Ravens take on the Texans. If the WWE and NFL events manage to pull in a new breed of sports-hungry Netflix viewers, the company could continue to strike live viewing deals with popular sports leagues.
The company also revamped its advertising platform, celebrated a high degree of viewer engagement with original Netflix content, and announced a test of two physical stores that could turn into a global retail chain in the long run.
Netflix's return to cultural relevance
It's hard to keep up with Netflix's good news, really. The old FANG group of elite stocks may be long gone, but Netflix is climbing up the ladder of cultural relevance again. Meanwhile, the stock is sniffing at fresh all-time highs again, nearly matching the peak pricing of 2021.
A lot has changed since the previous peak. Netflix's trailing revenues have soared 27% higher over the last three years, while adjusted earnings per share rose by 49% and free cash flows quintupled. Investors are embracing the company's financial strength, but the stock still looks modestly priced at 8 times sales and 29 times forward earnings.
Again, it's kind of hard to keep up with Netflix's good news, even while looking at its financial statements. The new Netflix strives for profitable growth, and that strategy is paying off in spades.
If you don't have this industry-defining growth stock in your portfolio yet, it's not too late to add it.
