One of the biggest reasons people decide to cut the cord with cable providers is cost. Although cable companies offer consumers a variety of different packages, the costs associated with traditional television services can be hard to justify if you only watch a limited number of channels. Given this dynamic, streaming services ballooned in popularity over the last several years.

Streaming content is offered by a host of different companies. For example, media conglomerate Disney has its own services through Disney+ and Hulu, while broadcasters such as Comcast are looking to get in on the action by offering its own streaming channel, Peacock. Even big tech enterprises including Apple, Alphabet, and Amazon offer streaming services as well.

Although the competition is no doubt intense, one company may be emerging as the clear-cut winner of the streaming wars. Netflix (NFLX 0.98%) is an early pioneer of streaming, and is the home of worldwide sensational content, including titles such as Stranger Things and The Queen's Gambit.

Netflix just reported its fourth-quarter earnings for the period ended Dec. 31. After knocking Wall Street's expectations out of the park, is Netflix stock a buy right now? Let's dig in and assess why now could be a unique time to scoop up some shares in Netflix stock.

There are 260 million reasons to love Netflix

As of Dec. 31, Netflix boasted 260.3 million global subscribers on its platform. According to industry research, this makes Netflix the undisputed leader of streamers based on subscriber count, and it isn't even close.

During the fourth quarter, Netflix added 13.1 million subscribers -- a record for the fourth quarter and handily topping Wall Street's estimate of 8.7 million.

Given this robust growth, perhaps it's not surprising that the company's management proclaimed:

We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment. If we can continue to improve Netflix faster than the competition, we'll have an increasingly valuable business – for consumers, creators, and shareholders.

With such a bold vision for the company, investors may be curious what the road ahead looks like and how Netflix plans to get there.

A family streaming a movie in their living room.

Image source: Getty Images.

Revenue and profits are expected to soar

During the earnings report, management provided investors with guidance for the first quarter. The company is forecasting Q1 revenue to increase 13.2% year over year to $9.2 billion. While this level of top-line growth is respectable, the company's profitability projections are what caught my eye.

Management guided for operating margins in Q1 to reach 26.2% -- a meaningful expansion both year over year and quarter over quarter. The company's Q1 and Q4 operating margins in 2023 were 21% and 16.9%, respectively. As such, Netflix's net income forecast for the first quarter of $1.9 billion is essentially double that of Q4 and would represent 46% growth year over year.

While revenue acceleration and disciplined cost measures are combining for healthy margin expansion and increased profits, Netflix has a number of catalysts that could very well fuel longer-term sustained top- and bottom-line growth.

A little more than a year ago, Netflix released a low-cost subscription tier that featured advertisements. Since its launch in November 2022, Netflix's ad tier now has 23 million subscribers -- up from 15 million just two months ago. Although this is encouraging, investors should keep in mind that Netflix's ad tier is only available in a dozen countries. Given the company's global footprint of over 190 markets, the initial success of the advertising tier could serve as a bellwether for the company as it continues to expand and hone this offering.

Another potentially huge tailwind for Netflix is its recent partnership with WWE. For years, one of Netflix's major drawbacks was its lack of sports content. However, over the last couple of years, the company has bolstered its programming with documentary-style shows featuring Formula 1 racing and the National Football League. The addition of WWE content opens the door for new engagement channels through sports entertainment, which management believes will augment its advertising business.

Should you invest in Netflix stock?

An investment in Netflix stock might come with the belief that the company can actually achieve its growth targets by successfully pulling off all of its new pursuits. In other words, over the long run the company's hefty investments in sports, advertising, gaming, and more should come with meaningful growth. While the company has not operated many of these new services for very long, I am bullish on the long-term prospects.

Netflix's evolution is both fascinating and impressive. What started out as an alternative to brick-and-mortar video rental stores like Blockbuster eventually pioneered an entirely new way to consume content online. However, over the years, Netflix has invested more into producing original content as licensing deals expired and returned to their original homes. Now, with so many different catalysts on the horizon, the company is quietly transitioning from a media business to a full-blown entertainment platform.

I think a prudent strategy would be to dollar-cost average into Netflix stock over time. Should the company's various bets translate into more subscribers, Netflix's long-term revenue and profit profiles could grow exponentially.

So even though its latest earnings report was solid, I see many reasons to buy some shares and plan to hold for the long term. Given its strong position and increasingly differentiated product offerings, Netflix is the clear-cut king of streaming.