Analyst on Netflix (NFLX): There’s No ‘Panic, Collapse Here’; Ads Business Still in Early Stages of Growth

Core Insights - Netflix, Inc. (NASDAQ:NFLX) is experiencing a post-earnings stock drop, but analysts suggest there is no cause for panic as the company continues to grow and is seen as an "execution story" [1] - The company's advertising business is still in its early stages, with significant growth potential as it works to attract more advertisers and subscribers to its ad tier [1] - Netflix has successfully transitioned from low single-digit revenue growth to high teens growth by launching its ad tier and implementing restrictions on password sharing [1] - The company is projected to grow earnings at over 30% this year, indicating strong growth dynamics [1] - While Netflix's growth momentum is expected to continue, investments in content and licensing are anticipated to grow at a slower rate, which may lead to higher margins in the next two to three years [2] Company Analysis - The ad tier is currently described as relatively unexciting, resembling traditional TV ads, but there is an opportunity for Netflix to enhance the ad experience in the coming years [1] - The company's revenue growth was previously below 10%, prompting the introduction of advertising as a strategy to regain growth [1] - Analysts believe that while Netflix has potential, other AI stocks may offer greater returns with limited downside risk [2]