To The Moon

Netflix, the leading streaming service provider, reported its fourth quarter 2023 results on January 23, 2024. 

The company beat analysts' expectations on both revenue and earnings, but missed on subscriber growth. 

Netflix added 8.5 million paid subscribers in Q4, bringing its total to 241.2 million, but fell short of its own guidance of 8.8 million. 

The company attributed the lower-than-expected growth to the impact of the COVID-19 pandemic, which accelerated demand for streaming in 2020 and created a tough comparison for 2021. 

Netflix also faced increased competition from new entrants like Disney+, HBO Max, and Peacock, as well as existing rivals like Amazon Prime Video and Hulu.

Despite the slowdown in subscriber growth, Netflix showed strong financial performance in Q4. 

The company posted revenue of $7.67 billion, up 21.5% year-over-year, and earnings per share of $1.19, up 44.4% year-over-year. 

Netflix also generated positive free cash flow of $1.9 billion, and announced that it will no longer need to raise external financing to fund its operations. 

The company also said that it will explore returning cash to shareholders through share buybacks, as it expects to maintain a consistent level of debt.

Based on these results, Netflix is a buy for long-term investors who believe in the company's competitive advantage and growth potential. 

Netflix has a loyal and engaged customer base, a diverse and original content library, a global presence, and a scalable and efficient business model. Netflix also has the opportunity to expand its revenue streams beyond subscriptions, such as licensing, merchandising, gaming, and advertising. 

Netflix is trading at a forward price-to-earnings ratio of 48.6, which is reasonable compared to its historical average and its peers. 

Netflix is a buy for investors who are willing to accept the risks of volatility, competition, and regulation, and who have a long-term horizon.