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Got $1,000? Take a Look at These 2 Streaming Giants

By Jose Najarro - Jun 10, 2021 at 11:00AM

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One is in audio, the other in video.

In today's video I look at fundamentals and valuation metrics for Spotify (SPOT 2.20%) and Netflix (NFLX -0.58%). Below I share a few highlights from the video on why investors should add them to their watch lists. 

Three reasons to add Spotify to your watch list

  1. Spotify reported 24% year-over-year (YOY) premium subscriber growth and 16% YOY revenue growth for the first quarter of 2021.
  2. Spotify has solid fundamentals for its trailing 12 months (TTM). It has positive cash flow from operations and more cash and short-term investments than debt.
  3. Spotify continues to grow in the audio market. In the past few months, it has acquired Betty Labs, which accelerates its entry into live audio, and has made partnerships with companies like Anchor, WordPress, and Facebook.

Three reasons to add Netflix to your watch list

  1. Netflix is a growth monster that has seen its full-year revenue increase by at least 24% for the past five years.
  2. Netflix has solid fundamentals for its TTM. It has positive cash flow from operations and positive earnings. 
  3. Netflix projects 1 million net additions to paid subscribers for the second quarter of 2021. This guidance is one of the lowest Netflix has ever provided, but management anticipates reacceleration in growth for the second half of the year.

Click the video below for my full thoughts and analysis. 

*Stock prices used were the mid-day prices of June 9, 2021. The video was published on June 9, 2021. 

Jose Najarro owns shares of Spotify Technology. The Motley Fool owns shares of and recommends Netflix and Spotify Technology. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$242.70 (-0.58%) $-1.41
Spotify Stock Quote
$122.73 (2.20%) $2.64
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$177.49 (-0.48%) $0.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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