After standing with the bull in the preliminary stages NetflixIn the latest earnings report, CNBC’s Jim Cramer explained why the quarter made him more optimistic about the company’s future, saying he was impressed by management’s outlook and commentary on content.
“If you were concerned that Netflix didn’t have enough leverage to drive future growth, or at least not enough growth to justify the stock’s price-to-earnings multiple, I think last night’s earnings report put those concerns to rest,” he said. “In the short term, the Netflix bears will hibernate, but as long as all these positives are kept in mind, they will inevitably come out of their nests and try to hammer this best-in-class stock with what I think will be a long-term move higher. company.
Netflix reported late Thursday that beat Wall Street expectations for profit, revenue and paid membership growth. Shares of the streaming giant were up 11% on Friday morning and maintained gains at the close.
Cramer was encouraged by management’s guidance for the current quarter and 2025, as the company expects to maintain double-digit revenue growth, which some investors worry will be difficult to sustain. He also appreciated co-CEO Ted Sarandos’ explanation of Netflix’s vast library and engagement, including his claim that members watch an average of two hours of content per day. Cramer noted that Sarandos also said the streamer is focused on “adding more value to the package” rather than bundling content with other streaming services, as some competitors do.
Such a breadth of content has Cramer optimistic about Netflix’s ability to expand its advertising tier, noting that hits such as “Emily in Paris,” “Selling Sunset” and “Squidward Match” will also be available to air on Netflix. Two National Football League games on Christmas Day. He also likes Sarandos’ positive take on how artificial intelligence will impact business.
“I’m not saying that Netflix has become an AI play, not at all, I’m just saying that between the growing library, clear customer interest in ad layer models, and their ability to harness the power of AI, we have a lot of positives here. side, and that translates into a lot of money,” Cramer said.
About The Author
