Investing $10,000 in Netflix Stock a Decade Ago Would Result in This Amount Now
Many people are familiar with Netflix, but they may not fully grasp its dominance within the stock market.
Consider this: Netflix's market cap is approximately $300 billion, making it the 25th largest company in the United States by this measure. That's larger than renowned corporations such as McDonald's, PepsiCo, and Disney, among others.
Investing a modest $100 in Netflix stock on its initial public offering (IPO) date, May 23, 2002, would be worth an astounding $59,000 as of now.
Since its IPO, Netflix has been a substantial success. But how has it performed over the past decade? Let's explore a more substantial investment of $10,000 made in 2014.
Netflix in the last decade
A $10,000 investment in Netflix in September 2014 would now be worth approximately $111,000.
That equates to a compound annual growth rate (CAGR) of 27.2% - an impressive figure.
In contrast, the S&P 500 has recorded a CAGR of 13.2% over this time period. This means that Netflix has on average developed the return of the benchmark index by more than doubling every year for the last decade.
However, Netflix faced a substantial setback in 2022, as its stock plummeted over 75% due to concerns about increased competition and the company's short-term inability to increase its subscriber base.
Nevertheless, Netflix managed to overcome these challenges, and its stock has soared again in the last two years, reaching new all-time highs once more.
So, should you invest in Netflix now? The company is currently thriving, with revenue growth of over 16% in its most recent quarter (June 30, 2024) and an operating margin at a five-year peak.
In essence, it appears that this streaming titan is still going strong.
Given Netflix's impressive track record of growth, many individuals might consider investing in the company to potentially replicate its financial success. Over the last decade, a $10,000 investment in Netflix would have yielded a significant return of approximately $111,000, reflecting a compelling compound annual growth rate of 27.2%.
In the world of finance and investing, Netflix's performance has been noteworthy, outperforming major corporations and even the S&P 500 index by a substantial margin.
