Celebrate Away, Netflix! or Netflix, Let the Festivities Commence!
In this lively podcast episode, Our Website Money's Dylan Lewis chats with co-host Jim Gillies and guest analyst Sanmeet Deo about the latest financial news. Through engaging, informative discussions, they cover a wide range of topics, including Netflix's subscriber growth and pricing strategies, market valuations, and the future of artificial intelligence in human health.
First up, Dylan and Jim delve into Netflix's impressive earnings and the company's plans for price increases, all while exploring the potential impact on its advertising strategy. Jim points out Netflix's revenue growth of 16% and operating profit margin hike of 6 points, along with their addition of nearly 20 million new subscribers during the holiday season. The analysts also note that half of the recent signups were for the ad-supported tier, resulting in a 30% quarterly increase in memberships.
However, they caution that Netflix currently trades at an expensive valuation of 60 times free cash flow, raising questions about its future growth potential. Dylan brings up the idea that the ad-supported tier could grant Netflix added pricing power, potentially encouraging some premium subscribers to switch or new users to opt for the cheaper ad tier.
Shift gears with Jim as he laments the frothy market under the Trump administration, with the Schiller PE ratio reaching historic highs. He discusses the challenges of high valuations and how they can inhibit future returns, emphasizing the importance of historically low numbers in enabling higher returns. Jim also mentions worries about the market's speculative nature, as indicated by soaring option trades and the boom in margin activity.
Sanmeet Deo joins the episode to talk about the overlapping future of artificial intelligence and human health through Function Health, a platform that empowers people to live longer, healthier lives. They touch on the possibilities of AI in early detection and precision medicine and explore the opportunities for investors seeking anxiety-free investing in the booming healthcare industry.
Tune in to this insightful podcast episode to learn more about the latest financial news, deep dive into market trends, and gain valuable insights for your investment strategies. Don't miss it!
In the discussion, Dylan suggests that Netflix's ad-supported tier could give the company more pricing power, possibly leading some premium subscribers to switch or new users to choose the cheaper option. Later, Jim discusses the difficulties of investing in a frothy market, highlighting how high valuations can hinder future returns and the importance of low numbers for higher returns.
