3 Streaming Stocks to Watch as Subscribers Drive Growth

Group 1: Retail Sales and Consumer Spending - The retail sales report for June indicates a slight increase in consumer discretionary spending, providing temporary relief for companies reliant on consumer budgets [1] - Streaming services remain strong within consumer discretionary stocks, as consumers prioritize these services over other budget cuts [1] Group 2: Streaming Companies' Profitability - Companies in the streaming sector have adapted by offering discounted monthly service prices while compensating through ad revenue [2] - Key metrics for evaluating performance during earnings season will include subscriber numbers [2] Group 3: Netflix (NFLX) Performance - Netflix has shown impressive strategic pivots to enhance monetization without alienating subscribers, despite its high stock price [3][5] - The company reported 12% year-over-year revenue growth and 27% year-over-year earnings per share growth in its first-quarter earnings [4] - Analysts project 22% earnings growth for Netflix for the full year [4] Group 4: Walt Disney Company (DIS) Recovery - Disney's stock has increased over 43% in the last three months, largely due to its streaming operations turning a profit for the first time [9] - Streaming accounts for about 25% of Disney's annual revenue, providing predictable revenue that is more defensive compared to its theme park and cruise line operations [10] - Analysts have raised price targets for Disney stock, which is currently valued at 24 times earnings [11] Group 5: Roku (ROKU) Market Position - Roku offers both hardware (smart TVs and Roku sticks) and monetization through ad revenue, positioning itself well in the connected television space [13][14] - Roku's stock has risen 55% in the last three months, nearing its consensus price target [15] - Despite positive trends, Roku is not yet profitable, and caution is advised before its earnings report [16]