Netflix, Inc. (NFLX – Get Rating), the undisputed king of the video streaming industry, faces significant challenges such as intensified competition. Therefore, in this article, I have evaluated the fundamentals of three internet stocks, eBay Inc. (EBAY – Get Rating), Meta Platforms, Inc. (META – Get Rating), and Alphabet Inc. (GOOGL – Get Rating), which could be better portfolio additions than NFLX.
The streaming sector has witnessed explosive growth in recent years. As more market players enter the scene, NFLX’s dominant position is facing growing challenges. For instance, NFLX’s market share in the United States declined to 44.2% in the first quarter, marking a 6% year-on-year decrease. Although it remains the market leader, this decline underscores the intensifying competitiveness of the streaming landscape.
Additionally, despite analysts anticipating a 7.7% year-over-year increase in NFLX’s revenue for the third quarter (ending September 2023), it’s worth noting that the company has fallen short of its consensus revenue estimates in three of the trailing four quarters, which is disappointing. Also, NFLX’s trailing-12-month gross profit margin of 38.77% is 21.5% lower than the 49.37% industry average.
On the flip side, internet usage continues to experience significant growth due to the ongoing process of digitalization and the widespread use of smartphones. Additionally, the internet industry’s outlook is bolstered by the swift uptake of Artificial Intelligence (AI) and the expansion of 5G connectivity.
At the beginning of the third quarter of 2023, around 5.19 billion people across the globe were using the internet, constituting 64.4% of the total global population. Furthermore…
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