3 Reasons Netflix Can Continue Crushing the S&P 500 in 2025 and Beyond

Core Viewpoint - Netflix is expected to report strong earnings, continuing its momentum as a leading growth stock, driven by a tariff-resistant business model, high-margin content distribution, and pricing power [1][17]. Group 1: Tariff-Resistant Business Model - Netflix's stock has shown resilience, with an 8.8% year-to-date increase, outperforming the broader market [2]. - The company generates approximately 60% of its revenue in currencies other than the U.S. dollar, highlighting its international growth potential [4]. - Revenue growth in the U.S. and Canada was only 6.9%, while international segments like Asia Pacific saw an 18.5% increase, indicating the importance of expanding international memberships [4][5]. Group 2: High-Margin Content Distribution - Netflix's strategy involves balancing the quantity and quality of its content, which has led to successful subscriber retention [6][8]. - The company has effectively produced high-quality content, attracting viewers through major events and new series [7][10]. - The international success of shows like "Squid Games" demonstrates Netflix's ability to create hits that resonate globally, enhancing its revenue potential [11][12]. Group 3: Pricing Power - Netflix has consistently increased subscription prices, with the latest hike resulting in over 55% of sign-ups coming from ad-supported plans [13][15]. - The focus on ad revenue may lower average revenue per subscriber but can enhance overall content utilization and profitability [14]. - The company is guiding for a revenue of $10.416 billion for the first quarter of fiscal 2025, reflecting an 11.2% year-over-year increase, alongside an operating margin of 28.2% [15][16].