Netflix’s Wild Run: Will the Hot Streak Continue or Is a Stock Split Coming?

Summary

Earn Your Leisure Podcast Summary Episode: Netflix’s Wild Run: Will the Hot Streak Continue or Is a Stock Split Coming?
Release Date: July 26, 2025
Hosts: Rashad Bilal and Troy Millings

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Introduction to Netflix as a Hot Investment

In this episode of Earn Your Leisure, hosts Rashad Bilal and Troy Millings delve into the impressive performance of Netflix's stock in 2025. They explore whether the tech giant's upward trajectory will persist or if a potential stock split is on the horizon.

Netflix's Exceptional Stock Performance

Troy Millings kicks off the discussion by highlighting Netflix's remarkable stock surge over the past few years. He notes, "They are the preeminent platform to have content on. They are the HBO of our era and I don't think they get enough credit for how well they have run that business" (01:20). This comparison underscores Netflix's dominance in the streaming industry, rivaling the legacy of HBO.

Rashad Bilal adds context to the stock's recent pullback despite strong earnings reports. He explains, "A company reports its earnings, it beats on every line... and the stock pullback are like 5%. What you have to take into account is where it came from" (03:08). The significant rise from a 52-week low of $588 to over $1,200 has led to a natural profit-taking phase, which is a standard market behavior rather than a sign of underlying issues.

Potential for a Stock Split

The conversation shifts to the possibility of Netflix initiating a stock split. Troy emphasizes the stock's high valuation, suggesting, "I think a split would be helpful especially if it gets close to that two thousand dollar range" (05:42). A stock split could make shares more accessible to a broader range of investors, potentially sustaining investor interest and liquidity.

Rashad concurs, stating, "They have run this business incredibly well and I still think it has room for expansion... I’d be surprised if over the next year they don’t split" (04:38). Both hosts agree that a split might be imminent given the current price levels and market dynamics.

Competitive Landscape and Market Position

The hosts discuss Netflix's position relative to competitors like Disney and emerging platforms such as Google and YouTube. Troy points out, "The only competition probably is Google slash, YouTube and I think there are leaps and bounds in terms of quality of content" (04:40). Despite intense competition, Netflix maintains a superior content quality and strategic partnerships, such as their recent deal with Max Killerman for boxing events, which Rashad anticipates will be "the most watched fight of all time" (04:45).

Financial Analysis and Sustainability

A deep dive into Netflix's financial health reveals strong metrics that support its robust stock performance. Troy highlights key figures: "Netflix free cash flow is 8.5 billion... Beta is 1.62, 52 week high is 1341" (05:58).

Rashad elaborates on Netflix's operational efficiency, stating, "They figured out how to get content at a lower price... they’ve grown and so it's just one of those cases is good. Good enough. It's great" (06:43). The hosts commend Netflix for optimizing content acquisition costs, which bolsters profit margins and sustains long-term growth.

Future Outlook and Expansion Opportunities

Looking ahead, Rashad emphasizes Netflix's potential for global expansion, "America is the dominant market, but there's still countries, there's still areas and regions that do not have this service" (04:40). Expanding into untapped international markets could provide significant growth opportunities.

Troy adds optimism about Netflix's strategic moves, including their ventures into live sports and partnerships with major sports figures, positioning the company to capture diverse revenue streams beyond traditional streaming.

Institutional Confidence and Market Sentiment

The episode also touches on institutional investments in Netflix, with Troy mentioning, "Fidelity added 1.3 million shares in March as well too. So if you want to see what the whales are doing them and State Street have added shares" (07:26). This institutional confidence signals strong market sentiment and support for Netflix's continued growth.

Investment Recommendations

For investors considering Netflix, Rashad recommends ETFs as an alternative investment vehicle. He states, "If you look up which ETF has the largest allocation to Netflix, you will find that FDN it's a good ETF performed well for us this year" (07:57). This approach allows investors to gain exposure to Netflix's growth without purchasing individual shares at high price points.

Conclusion

The hosts conclude with a strong endorsement of Netflix's investment potential, underscoring its leadership in the streaming industry, strategic financial management, and promising expansion prospects. They express confidence that Netflix will continue to thrive and possibly initiate a stock split in the near future, making it an attractive option for both long-term investors and those seeking accessible entry points through ETFs.

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Notable Quotes

• Troy Millings:
  "They are the preeminent platform to have content on. They are the HBO of our era and I don't think they get enough credit for how well they have run that business." (01:20)

• Rashad Bilal:
  "A company reports its earnings, it beats on every line... and the stock pullback are like 5%. What you have to take into account is where it came from." (03:08)

• Troy Millings:
  "I think a split would be helpful especially if it gets close to that two thousand dollar range." (05:42)

• Rashad Bilal:
  "They have run this business incredibly well and I still think it has room for expansion... I’d be surprised if over the next year they don’t split." (04:38)

• Rashad Bilal:
  "They figured out how to get content at a lower price... they’ve grown and so it's just one of those cases is good. Good enough. It's great." (06:43)

• Troy Millings:
  "Fidelity added 1.3 million shares in March as well too. So if you want to see what the whales are doing them and State Street have added shares." (07:26)

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Earn Your Leisure continues to provide insightful analysis blending financial expertise with pop culture relevance, making complex investment topics accessible and engaging for its audience.

Transcript

[A]

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[B]

Talking about another hot investment? Netflix, one of the best performing stocks this year, said that in 2025. Well, it said that their ad supported tier will double revenue this year. So is that a signal that the stock will have a continuous run or will we see some pullback because it's already going up almost 300 in the last couple of years. I mean they are the preeminent platform to have content on. They are the HBO of our era and I don't think they get enough credit for how well they have run that business. The fight was pretty good. That was on last weekend. The WWE edition, possibly the UFC edition has helped a lot. I just think they've run this business incredibly well and then if they can find a way to double and then maybe even triple in three or four years that ad supported tier while having premium content and a premium price, I don't see even I have all the other subscriptions to have prime and Max or HBO Max, whatever it's called now, no one's better. The only competition probably is Google slash, YouTube and I think there are leaps and bounds in terms of quality of content. So more they have a pullback for sure, but I don't think it's a pullback that will go into correction territory. If I can get them at, I don't know, probably a 10 drop from here, I'll be Happy. But this stock has done incredibly well and that management has to get a lot of credit for doing well and just kicking apples back in on that side of the business as well.

[A]

Yeah, yeah, I know people were a little confused and we've gone over this a few times. A company reports its earnings, it beats on every line. Revenue, earnings per share, free cash flow, operating income, and the fill here beat on all those lines and the company still sees the. So the, the stock pullback are like 5%. What you have to take into account is where it came from. And so if you look at December when it was sitting around 8:40, currently trading over $1200, it's had a nice run up here. The problem is it might have run up too high.

[B]

Too fast.

[A]

Yeah, too fast. And so what you'll see is people take profit and that's fine. That's part of the game. I don't see a correction happening for it. Like you said, it's the leader in the space. It's going to continue to be the leader in the space and I still think it has room for expansion in, in terms of. Yes, America is the dominant market, but there's still countries, there's still areas and regions that do not have this service. And you could try to replicate it, but nobody's done it successfully. In terms of competitors, yes, Disney has been there in terms of the amount of subscribers. I know Netflix is no longer sharing their subscriber count, but Disney has a problem and we talked about it and hopefully they'll solve it in terms of live sports and ESPN and how that was a debt trap for them and Netflix has solved it. In fact, they've actually added sports. Like I said, that absolutely it. And you know who they just signed? They just signed Max Killer, man.

[B]

No way.

[A]

What?

[B]

Yeah.

[A]

So Max Killerman is now on Netflix for boxing and they're gonna have the number one.

[B]

Smart.

[A]

Yeah, we're just months away from it. This, it's gonna be by far the most watched fight of all time. They have that in their belt. Obviously they're doing football. We'll see what they can do. In terms of college sports. I know TNT signed a college football, but who knows what happens with college basketball the way things are looking. So yeah, Netflix is here to stay. I, I'd be surprised if over the next year they don't split.

[B]

I was just going to ask, is it time for a split? I mean, because their 52 week low was what, 588? 587.

[A]

Yeah.

[B]

Highest 1341. I think it May be time for a split. I'm sure the shareholders who have been there for 10 to 15 years may not want it, but it may be time. It may be time. Yeah.

[A]

It's run that hot. And so now the, the valuation for the company has risen to a point where. Who else in the space has that type of valuation? Nobody's near them. Yeah, it might be a time. It might be time.

[B]

Rashad, do you think they should split or they should keep the price where it is currently? Yeah, I think, I think a split would be helpful especially if it gets close to that two thousand dollar range. Fifteen hundred. Yeah. Gotta, gotta look at that for sure.

[A]

Yeah.

[B]

Just a couple steps on Netflix free cash flow. 8.5 billion. Let's see Altman Z score, which I've talked about at Invest Fest last year. But it's the probability of them going out of business or bankrupt is 13 out of a hundred almost impossible. Beta is 1.62 52 week high. Like I said, it's 1341. The stock has been on a absolute tear. What would especially in that industry growth margin is 48. Their operating margin is 29. They're netting 24 for a cost heavy. And I remember when the conversation was is investing in premium evergreen content going to collapse them? And they just found a way. They figured it out to be better.

[A]

Yeah. They figured out how to get content at a lower price there. You know what it reminds me of? And it's starting to feel like when we were watching video report and is good. Good is not good enough anymore. Like great is not good enough.

[B]

They're so great. Yep.

[A]

Yeah. And it. To see it pull back after it beat on everything is one of those times where it's like hey, yeah, they beat. I know operating class flow is something that they were big on and it still beat it. It only beat it by 300 million, 400 million, but it's still a beat. Right. If you're not, if you're not growing, then you're declining and they, they've grown and so it's just one of those cases is good. Good enough. It's great. Good enough that I'm with them long term.

[B]

Good sign. Fidelity added 1.3 million shares in March as well too. So if you want to see what the whales are doing them in State street have added shares. So maybe a pullback if it ever gets back to definitely 900 range. But if we get to.

[C]

I don't.

[B]

Know, 1188, which sounds crazy, it should be a good entry point into the stock yeah, if you have not been investing into it and I gave a.

[A]

Great ETF and everybody shout out to everybody in Eylu. Shout to everybody that that was with us in the class on Thursday. If you look up which ETF has the largest allocation to Netflix, you will find that fdn it's a good it's a good ETF performed well for us this year. If you can't get a share of Netflix at 1200, that would be a nice alternative.

[D]

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[C]

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