How To Buy Netflix Stocks & Shares

How to buy Netflix shares

Our view: The next generation of online trading platform means you can get setup & buy Netflix shares in as little as 5 minutes!

1. Select a share platform - See our top platform picks
2. Open your share account - To do this, you will need your bank details and national insurance number
3. Fund your account - You will need to fund your a/c with a debit or credit card or bank transfer
4. Search for the share using the Netflix stock code - Type in the NFLX stock code into the search box
5. Check out the latest info and price for the selected share - Some platforms offer free research and analysis
6. Buy the share - Nice and easy!

Trading news for Netflix

Is now a good time to buy Netflix shares?

4 Tips for trading Netflix stock:

1. Do your research – Before buying or selling Netflix stock, research the company’s financial performance and other factors affecting its stock price.
2. Set a strategy – Have a clear plan for buying and selling Shell stock based on your research and your risk tolerance.
3. Use stop-loss orders – Use stop-loss orders to limit your losses if the stock price falls below a certain level.
4. Diversify your portfolio – Don’t put all your money into Netflix stock. Diversify your portfolio to reduce your risk.

What are the benefits of investing in Netflix?

Potential for growth

Netflix’s subscriber base has grown rapidly over the past five years. Globally, the company has over 209 million subscribers as of April 2023, up from 70 million in 2015.

A growing content library, investments in new technology, and international expansion have all contributed to this growth. Indian, Brazilian, and Mexican markets have been particularly successful for Netflix, where it has established a solid presence.

Original Content

Netflix is known for producing original content, such as its flagship show ‘Stranger Things’. They have arguably pioneered this approach to streaming, as other companies such as HBO and Disney have also mimicked this approach.

A commitment to originality and their dedication to investing in this content has built a loyal customer base. This loyalty from customers makes them a valuable investment opportunity.

Subscription model

Compared with a ‘revenue through advertising’ model, Netflix’s subscription-based model makes them less risky in investment. This is because it’s easier to track growth and progress via subscriptions than business models that rely on advertising revenue.

A simple way to estimate Netflix’s value per subscriber is to divide its market capitalization (market cap) by the number of subscribers. As of April 2023, Netflix’s market cap is around $147 billion, which equates to roughly $703 per subscriber. This calculation can roughly estimate the value the market assigns each Netflix subscriber.

Brand recognition

In a relatively short period, Netflix has become a global leader in streaming services. From an investment standpoint, the strength of the brand in terms of the productions it has made, the deals it has made for streaming popular movies and series, together with its influence in pop culture (e.g. the ‘Netflix & Chill’ memes) make Netflix a strong brand, and therefore, makes it worth considering as an investment opportunity.

Use Of Data & Analytics

Today, many companies are data-driven, but Netflix actively uses the analytics and data it collects about consumer behaviour to improve its services. By doing this, the company has retained subscribers and attracted new ones. 

It makes business decisions based on accurate data and trends collected consistently, making it an appealing investment prospect for investors.

What are the risks of investing in Netflix?

Competition

There are many notable streaming platforms within the market that Netflix is competing with, and the major players include Disney, HBO, and Amazon, to name a few. A potential risk is that these companies could price Netflix out of the market based on the content they can deliver for lower prices. Therefore, this could cause the value of Netflix to drop in the markets.

Cost of production

Because Netflix produces a lot of original content, which has high production costs, this could cause problems for the company in the future, as these costs are likely to continue to increase, which may affect its ability to offer stock dividends and its profitability in the future.

Reliance on debt financing

Due to its debt financing practices, Netflix has accrued a large amount of debt. The company relies on debt financing to facilitate its production and running costs.

As of April 2023, Netflix had over $17 billion in debt. Even though this may seem like a significant amount, it is important to consider the company’s overall financial performance and long-term growth potential.

Due to the company’s heavy investments in content production and international expansion, Netflix’s debt levels have increased over the past few years. However, the company has also been able to generate strong cash flows from its operations, which has helped to sustain its growth.

Subscription cancellations

Subscribers to Netflix and other subscription-based content providers have what’s called a churn rate. This indicates to what percentage a subscription provider is losing subscribers. 

While Netflix has been in the news several times over the past few years for losing subscribers, it is also important to consider the overall statistics as well. Netflix had 192.96 million subscribers in 2020, 209 million in 2021, and 220.6 million in 2022.

With that being said, it is common for subscribers to hop between providers (e.g. Disney+) based on cost and content provided. This might be risky for investors if the company needs to retain subscribers in the future. 

Furthermore, their continual commitment to investment in original content, not all of it has been well received, and their distancing away from licensed content could contribute to a decrease in subscribers.

Pricing issues

Whenever Netflix has announced changes in its pricing, this has typically led to subscription cancellations. It appears that Netflix customers consider the monthly price a key attraction of its offering. 

With that in mind, it might be difficult for the company to offer other incentives for subscribers to continue their subscriptions if they are only concerned with pricing. This could prevent the company from increasing its revenue and subsequent profits since it will have to continue to bow to the pressure of consumer demand.

How to buy Netflix within an investment fund

A few investment funds offer ways to invest in Netflix. For example, Netflix can be invested in some of the ETFs (exchange-traded funds):

• First Trust S-Network Streaming and Gaming ETF (BNGE) (Netflix constitutes 4.33% of the overall portfolio at the time of writing)
• Fidelity MSCI Communication Services Index ETF (Netflix constitutes 4.14% of the overall portfolio at the time of writing)
• iShares Global Comm Services ETF (Netflix constitutes 4.10% of the overall portfolio at the time of writing)
• Invesco NASDAQ Internet ETF (PNQI) – (Netflix constitutes 3.94% of the overall portfolio at the time of writing)

Alternatively, there are other investment funds that Netflix can invest in, such as investment trusts, OEICs (Open Ended Investment Companies), and mutual funds. Here are a few examples of mutual funds that contain Netflix:

• Vanguard 500 Index Fund
• Fidelity 500 Index Fund
• Invesco QQQ Trust
• American Funds Growth Fund of America

How can I use spread betting or CFDs to trade Netflix stock?

Spread betting on Netflix shares enables investors to bet on the likelihood of the Netflix share price increasing or decreasing. So long as the price of the share moves in the direction that you have invested in, you’ll make a return on the investment.

With CFDs, traders receive a contract which essentially enables them to perform price speculation, meaning that they can speculate whether or not it will move in a certain direction. The difference here is that the value of your investment depends on how much the share price was when the contract started, compared with the price when the contract ends.

FAQs:

What is a Trading Platform?

A platform is a service that allows users to access and use a specific product or service.

In the financial industry, a platform may refer to a trading platform, a digital service that allows investors to buy & sell securities such as stocks, bonds, and derivatives.

These platforms often provide the following:

• Market information
• Tools for analysis and decision-making
• The ability to execute trades at a specified price

Many trading platforms offer additional features such as educational resources, research reports, and customer support. The choice of a trading platform can be an important factor for investors, as it can affect the accessibility, cost, and functionality of their trading activities.

Before investing in a specific company, it is vital to carefully research and evaluate the potential risks and rewards associated with the investment. This may include considering the company’s financial performance, industry outlook, management team, and potential for future growth to help assess the suitability of a particular stock for an individual’s investment portfolio.

When buying company shares, investors may also want to consider any compensation plans in place, such as dividends or stock buybacks. These forms of compensation can provide a source of income or the potential for capital appreciation over time. Buying a particular stock will ultimately depend on an investor’s risk tolerance, financial goals, and overall investment strategy.

Trading refers to buying and selling financial instruments such as stocks, bonds, and derivatives. When trading a particular security, such as shares of Royal Dutch Shell, investors seek to profit from changes in the security price over time. To deal effectively, investors should have a good handle on the factors that can affect the price of a security, such as economic conditions, company performance, and market trends.

Individuals can seek educational resources such as books, courses, or online articles to learn about trading and investing. If you want somebody else to guide you, speak to a financial adviser or professional to gain insight and guidance on trading strategies and risk management. Ultimately, the success of trading activity will depend on an individual’s knowledge, experience, and ability to make informed decisions in the market.

A portfolio is a collection of assets an individual or organisation holds for investment, such as stocks, bonds, and mutual funds. The composition of a portfolio can vary depending on an individual’s investment objectives, risk tolerance, and financial resources. Individuals may research other securities to build a portfolio and consider the company’s financial performance, industry outlook, and growth potential.

Portfolio management aims to maximise returns and minimise risk by carefully selecting and balancing the assets in a portfolio. This may involve diversifying the portfolio by investing in various securities from different sectors and industries and actively managing the portfolio by buying and selling securities based on market conditions and the individual’s investment goals.

It is crucial for investors to regularly review and assess the performance of their portfolio and make adjustments as needed to align with their investment objectives and risk tolerance.

Investing refers to committing money or capital to a financial asset or enterprise to generate income or capital appreciation. There are many different types of investments, such as stocks, bonds, mutual funds, real estate, and precious metals, and each has its own set of risks and potential rewards.

One example of a company that is often the subject of investment is Shell, a major energy company traded on stock exchanges worldwide. When considering investing in a particular company, it is essential to carefully research and evaluate the potential risks and rewards associated with the investment. This may include assessing the company’s financial performance, industry outlook, management team, and potential for future growth.

Individuals can seek educational resources such as books, courses, or online articles to learn about investing. It may also be helpful to consult with a financial advisor or professional to gain insight and guidance on investment strategies and risk management. Ultimately, the success of an investment will depend on an individual’s knowledge, experience, and ability to make informed decisions in the market.

How to select a share trading platform?

Trading platform services offered vary widely, and so do the costs.

5 things to consider when buying Netflix:

1. How do you want to trade?

There are different ways to trade shares online:

a. Short-term trading – Spread betting & CFDs

Are you looking to take advantage of short-term opportunities in the market?

With derivatives trading you can use products such as CFDs and spread bets to speculate on Netflix’s share price increasing or decreasing without having to take direct ownership of the shares themselves.

CFDs (Contracts For Difference) and spread betting are leveraged products, which means you can gain full exposure to company shares while only putting down a small deposit. While this magnifies possible profits, it does the same for losses.

CFDs & spread bets are popular among short-term traders as profits and losses are realised immediately – making opening and closing trades faster. However, this doesn’t mean you can’t use them for longer-term positions. You’d need to consider the costs of maintaining a position – such as overnight funding – and the bet duration, as spread bets have fixed terms.

They enable you to buy and sell shares online without owning the underlying asset. This has tax benefits and means you can trade both rising and falling markets (Tax laws are subject to change).

b. Long-term trading – Investing in shares

Are you looking to take a longer-term position in Netflix shares?

Share dealing services enables you to invest in company shares with a view to selling them for a profit at a later date. When you buy shares in Netflix you become a part owner of that Company and gain shareholder rights including any income that is paid via dividends (if applicable).

Different share-dealing services have different charging structures. Some platforms offer commission-free share dealing, but most operate on a fixed fee per trade, usually reducing this fee if you carry out more than a certain number of monthly trades.

Profits you make on share trading capital gains and dividends may be subject to tax at your rate. Taxation can be mitigated by trading within an ISA or Self Invested Personal Pension account.

2. Do you want to do a lot of trading?

Active investors will want to look for a platform that offers the lowest fees for volume trades.

If you are going to trade stock regularly, most trading platforms will offer lower prices based on volume.

3. How easy is this trading platform to use: what kind of tools and customer service does it offer?

How easy is the platform to buy and sell shares for new traders/investors?

Platform functionality is becoming the key battleground in persuading traders which platform to go for.

Mobile app features are also vital in offering traders alerts and buy/sell signals whilst on the move.

These are often the criteria that count most highly with users, so research and read the reviews.

Many investors are prepared to pay more fees for a platform that offers handy apps and services.

4. Types of trading accounts for long-term trading?

Some trading platforms offer general share trading accounts, ISA accounts, and Self Invested Personal Pension Accounts, which offer tax-free trading benefits (no tax on dividends or capital gains tax on realised profit).

Trader accounts offering ISA and SIPP include Interactive Investor, AJ Bell, and Hargreaves Lansdown.

5. Do you want to trade just in shares, funds, or shares & funds?

If you are also interested in investing or trading in funds, this may determine who you go with.

You must check with the platform provider if you are interested in ETFs, Investment Trusts, Open Ended Investment Companies (OEICs) or Unit Trusts. E.g. Some platforms only offer a limited number of collectives, such as OEICs.

The charging structure for funds held on the platform will vary. Over time the impact of such charges can be significant. Check the platform charging structure carefully.

About Netflix

Netflix, Inc. provides entertainment services. The company offers television (TV) series, documentaries, feature films, and games across various genres and languages. It also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. The company operates approximately in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.