Can This Unstoppable Stock Join the $1 Trillion Club by 2035?

Core Viewpoint - Netflix is positioned as a potential candidate to join the $1 trillion market capitalization club by 2035, given its innovative culture and significant growth in the streaming industry [2][4]. Company Overview - Netflix currently has a market capitalization of approximately $500 billion and has seen its shares rise by 1,250% over the past decade [2][9]. - The company has transformed the entertainment landscape by introducing streaming video, disrupting traditional cable TV [4]. Financial Performance - Revenue growth from 2014 to 2024 is projected at a compound annual rate of 21.6%, with a 12.5% increase in the first quarter of 2024 [5]. - Netflix is expected to generate $18 billion in cash for content spending this year, indicating strong unit economics and significant earnings [7]. Strategic Initiatives - Netflix has diversified its offerings by entering the video game market and live event broadcasting, while also addressing password sharing and introducing a cheaper ad-based subscription tier [6]. Market Penetration - The company has less than 50% penetration in connected households, suggesting room for future growth [8]. Valuation and Growth Projections - To reach a $1 trillion market cap in a decade, Netflix would need to grow by approximately 100% or about 7% annually [9]. - The current price-to-earnings (P/E) ratio stands at 56.5, which is considered high, and a reduction to 28 would require earnings per share (EPS) to grow at a compound annual rate of 15% to achieve the $1 trillion valuation [10]. Historical Performance - Netflix's EPS has historically increased at a faster rate than the projected growth, making the $1 trillion market cap a plausible target within the next decade [11].