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Netflix, the world’s largest streaming service, is continuing to bounce back from a sharp fall in its share price last year and, despite tough competition from rival streamers, the company posted healthy figures in its latest earnings release.
In the September quarter, Netflix revenue grew by 8% to $8.54 billion—with an overall profit of $1.68 billion for the year to Q3.
As Netflix noted in its recent note to shareholders, revenue growth was “slightly above our forecast due to higher-than-expected member growth”.
“Revenue growth in Q3 reflected a 9% year-over-year increase in average paid memberships due to the roll out of paid sharing, strong, steady programming and the ongoing expansion of streaming globally.”
Netflix added 8.8 million paid subscribers over the September quarter compared with the more modest 2.4 million added during the same quarter of last year.
The figures show the streaming giant is on a clear winning streak, with its password crackdown and cheaper ad tier clearly paying off. During the June quarter of 2023, Netflix added 5.9 million customers, and recorded revenue of $US8.2 billion, which was an increase of 2.7% on the same period of last year.
It was a very different story last year. In early 2022, shares in the company plunged by around 35% to $US226 as investors braced themselves for the company to lose millions of subscribers to rivals over the coming months. By September 2022, shares in Netflix were down by 62% compared to the year prior.
By October of 2022, the share price had begun to rise again as the company “reversed its subscriber slump”, surging 14% in a single day of trading. On November 1 last year, Netflix shares were worth $US286, and a discounted subscription service (featuring adverts) launched in Australia on November 3, costing only $US6.99 per month—roughly one-third the price of a standard Netflix subscription.
As of November 1, 2023, Netflix shares are worth $411.69.
Here is everything you need to know about buying and selling Netflix shares.
Related: Netflix’s Password Sharing Rules Explained
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How to Buy Stocks
There are several steps to take once you’ve satisfied yourself about the reasons for buying shares in a particular company.
1) Open an account
Whether you’re a seasoned share trader, or someone who is brand new to stock market-based investments, if you want to buy shares in Netflix, you’ll need to open an account with a regulated brokerage.
Stockbroking services for DIY investors come in a range of guises—from online investing platforms run by some of the biggest names in financial services to investment trading apps that work off your smartphone or tablet.
Before opening an account:
- keep your ultimate financial goals in mind
- be prepared to ride out stock market ups and downs
- aim to keep trading costs to a minimum
- remember that you may have to pay tax when selling stock.
Before buying any shares ask yourself:
- should I take financial advice?
- am I comfortable with the level of risk?
- what’s my budget?
- can I afford to lose money?
- do I understand the company in which I’m looking to invest?
- am I protected if my platform provider/adviser goes out of business?
2) Where is Netflix traded?
The ticker symbol for Netflix is NFLX. The company is traded on the Nasdaq in the US. Nasdaq’s trading hours are 9.30am to 4pm (US time) Monday to Friday.
Check you can buy US shares through your brokerage account and watch for foreign transaction fees.
Under the Double Tax Agreement between the US and Australia, there are specific tax rules governing income dividends.
Share dividends are taxed in the US. US companies must withhold and pay 30% of share dividends to the US Internal Revenue Service (IRS), which can usually be reduced to 15% if investors complete a valid W-8BEN form for the IRS. You may be able to claim back this withholding tax when preparing your Australian income tax return as part of a foreign income tax offset (FITO).
However, as each case varies, it’s worth speaking to a dedicated tax agent on your individual position.
3) Do your research
To find out more about Netflix, go online and visit the company’s investor relations page.
4) What’s your investing strategy?
People tend to invest either with a lump sum purchase, or via smaller amounts over time. The latter method is often referred to as a means of ‘dollar cost averaging’, a stock market hack which may help you pay less per share on average over time. Rather than waiting to build up a lump sum, it means an investor’s money is being put to use in the market straightaway.
5) Place an order
Once you’re ready to buy shares in Netflix, log in to your investing account or trading app. Type in the ticker symbol NFLX and the number of shares you want to buy, or the amount of money you’re prepared to invest.
6) Review Netflix’s performance
Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.
Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required—to maintain the status quo, buy more stock, or sell existing shares.
How to Sell Stocks
When you want to sell your holdings, log in to your investing platform, type in the ticker symbol and select the amount you want to sell.
If you’ve made an overall profit, you will be liable to pay Capital Gains Tax (CGT) when you sell your holdings. If you have owned the sharers for less than 12 months, you will have to pay 100% of the value of your capital gain at your applicable income tax rate—talk to your accountant about this.
However, if you have owned the shares for longer than 12 months, you may only need to pay 50% of the capital gain under Australia’s CGT discount rules.
How to Invest in Netflix via a Fund
Investing directly in individual stocks will, hopefully, be a profitable experience. It may also qualify you for shareholder perks specific to the company in question.
It can also leave you vulnerable to stock market volatility and unforeseen swings in share prices. Nowadays, even a solo tweet—let alone a full-blown geo-political conflict—can send shock waves through the stock market.
That’s why, many financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold hundreds, if not thousands, of company shares.
Being a large component of the Nasdaq index, Netflix is found in many ‘active’ and ‘passive’ (index tracker) funds incorporating a bias towards the US.
Note: investing in companies comes with no guarantees. When buying company shares, it’s possible to lose some, and very occasionally all, of your money. Past performance is no prediction of future performance and this article is not intended as a recommendation of any kind.
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Frequently Asked Questions (FAQs)
How do you buy shares in Netflix?
Netflix is traded on the US tech exchange, Nasdaq, so if you want to buy shares in the company from Australia, you will need to find a share trading platform that allows access to the exchange. Then it’s a case of opening an account, selecting how many shares you wish to buy, and then—voila— you own a fraction of Netflix. Watch out for charges though: you want to find a brokerage platform with low foreign currency exchange fees.
Is it a good time to buy Netflix?
Netflix has had seen major fluctuations in the past 12 months, crashing in early 2022 and then rebounding by November as it bypassed its expected “subscriber slump”. While the stock is sitting at a relatively good price in comparison to its past year on the market, whether or not you decide to buy shares now depends entirely on your own means. Check the latest profit update and do your own research before committing to shares.
What is the highest Netflix shares have ever been?
Netflix shares were worth a little more than $US220 in early September 2022, but the highest Netflix stock closing price of all-time so far is $US691 on November 17, 2021. As of September 7, 2023, they were trading at $US445.76
Does Netflix have ads?
From November 3, 2022, Australians have been able to access a cheaper version of Netflix on a basic package that contains ads for $6.99. The advertisments will be between 15 and 30 seconds and will be aired before and during programs.
What is Netflix Basic plan?
The Netflix Basic plan is the name for the discounted new service that features ads and arrived in Australia on November 3. Currently the premium Netflix service (without ads) costs $US22.99 a month. However, the future of the Basic plan is under a cloud, with new UK and US users unable to access it. It is, however, still available in Australia—for now.
