NETFLIX recently reported mixed Q2 2021 financial results. While revenue came in at $7.34 billion (vs. $7.32 expected), the company said it expects to add only 3.5 million new subscribers in Q3, well below the 5.4 million Wall Street was forecasting.
CURRENT INVESTMENT SITUATION
- Content streaming competition remains intense.
- The mixed financial results this week clipped 5% off NFLX's stock price.
- NFLX's investment performance turned negative (-5.3%) for the year.
Nonetheless, we believe the NETFLIX core investment thesis remains favorable for 2H 2021. And, the company's recently announced interest in the $200 Billion (2025 forecast) gaming space - despite it's significant competitive forces - presents some interesting options over the next five years.
After completing our exhaustive research, we purchased NFLX shares this week for our personal portfolio and established a modest $535 price target. As always, we sold out-of-the-money covered calls to generate immediate income.
Disclaimer: Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. Netflix, Inc. (NFLX) is a highly speculative stock. The valuation of futures, stocks and options fluctuate, and, as a result, you may lose your original investment. All trading strategies are used at your own risk. Consult with your own licensed financial professional before making any investments.
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