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

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

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.

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)

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 (0:01)

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B (1:20)

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 (3:08)

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.