Finimize - 📺 It might be time to nab Netflix

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Today's big stories

Social media company Snap reported its slowest quarterly revenue growth ever
How to know if you should binge on Netflix’s stock – Read Now
UK retail sales fell more than expected in September

Snap Back To Reality

What’s Going On Here?

Social media company Snap reported its slowest quarterly sales growth ever late last week.

What Does This Mean?

Once the darling of teenagers everywhere, Snap spent most of last quarter in a tailspin – shedding workers and unpromising projects with a kind of desperate, flailing abandon. And while some metrics did point upward (daily active users increased by a better-than-expected 19%), most were pretty damning: US users, for instance, spent 5% less time watching content on its platform than this time last year – likely lured away by TikTok, the hipper new kid on the block. And with advertisers slashing budgets anyway, that bad news comes at a particularly tricky time. That could explain why the average revenue per user fell a disappointing 11%, and why overall revenue grew by a tepid 6%. Investors, spooked by those figures and by Snap’s refusal to give guidance for the second-straight quarter, duly sent its stock plunging 27%.

Why Should I Care?

For markets: Social contagion.
For the third quarter in a row, Snap’s disappointing results have made investors skittish about social media stocks as a whole. The firm's quarterly report caused shares in companies like Meta, Alphabet, and Pinterest to lose a combined market value of $42 billion, as investors worry those ad-reliant platforms could go the way of Snap (tweet this). Things might not be as bad for them though: some analysts reckon picky advertisers might just be shifting their smaller budget allocations to the most efficient and proven platforms, like Facebook and Google.

Zooming out: Twitter teeters too.
Twitter’s another social media company whose stock dropped on Friday, but the blame for that can’t be pinned entirely on Snap. See, Twitter’s dip came on the back of reports that the US government is subjecting Elon Musk’s ventures – including his deal to buy Twitter – to national security reviews. This is the latest twist in a Musk-Twitter saga that’s beginning to seem like an M. Night Shyamalan film.

You might also like: How to profit from the Musk-Twitter drama.

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Analyst Take

Is Netflix A Buy After This Latest Plot Twist?

Reda Farran, Analyst

What a year it’s been for Netflix.

Back in April, the streaming giant announced it had lost viewers for the first time in a decade in a shocking update that sent its stock price down 35% in a single day.

I wrote back then about whether the firm could turn things around and whether you might want to think about buying shares.

So with the firm now reporting a return to growth, I decided to revisit that investment thesis.

That’s today’s Insight: is it time to binge on Netflix’s stock, or just time to chill?

Read or listen to the Insight here

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