Most people know Netflix (NASDAQ: NFLX). But not everyone understands what a stock market titan it really is.
Here’s one example: The company’s market cap (what it would cost to purchase all its outstanding shares) is about $300 billion. That makes Netflix the 25th-largest American company by market cap as of this writing, bigger than legendary companies McDonald’s, PepsiCo, and Walt Disney, among many others.
A meager investment of $100 in Netflix stock, made on its initial public offering (IPO) date of May 23, 2002, would be worth nearly $60,000 as of this writing.
Clearly, the stock has been a fantastic winner since its IPO, but how has it performed over the last 10 years? Let’s have a look at how a more significant investment of $10,000 investment made in 2014 has performed in the past decade.
A $10,000 investment in Netflix made in September 2014 would now be worth about $111,000 as of this writing.
That equates to a compound annual growth rate (CAGR) of 27.2% — which is fantastic.
For comparison, the S&P 500 has recorded a CAGR of 13.2% over that same period. That means Netflix has, on average, more than doubled the return of the benchmark index every year for the last 10 years.
What’s even more impressive is that Netflix suffered an enormous drawdown in 2022, as the stock fell more than 75% as concerns grew over increased competition and Netflix’s short-lived inability to expand its subscriber base.
However, the company put those concerns in the rearview mirror, and over the last two years, its stock has skyrocketed. It’s now once again making new all-time highs.
Is now the right time to invest in Netflix? Well, the company is firing on all cylinders, with year-over-year revenue growth topping 16% in its most recent quarter (the three months ending on June 30, 2024) and operating margin hitting a five-year high.
In short, it still looks like all systems go for this streaming giant.
Before you buy stock in Netflix, consider this:
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Jake Lerch has positions in McDonald’s and Walt Disney. The Motley Fool has positions in and recommends Netflix and Walt Disney. The Motley Fool has a disclosure policy.
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