Jim Cramer - Mad Money Netflix Inc. NFLX-Q BUY Jan 22, 2025

They won the streaming wars already. RSI is 62, so not overbought. Is 3% below all-time highs. It's possible they could add user-generated content like YouTube. Don't expect this to perform as well as it has.

They will be the internet channel for the world. Is worth $542 billion. Don't double down because you might get an intra-day swing when you can buy. Is one of the best run companies in the world.

It reports Thursday. Price targets and expectations have risen so high, that they must deliver an excellent quarter or the stock will tumble. He's a little nervous though he expects a good quarter.

Did everything right, yet down today ~4%. Expectations have been set very high for the traditional growthy and earnings momentum names. If everybody owns the stock, what's your next move? Someone out there didn't like what they saw and hit the sell button, and then it's just investor psychology at work.

He wrote a covered call on half his position before the report. Sold to open the July 25th $1,245 strike for $57 or 130% annualized (1-week calls). Close this morning at the open for $12 and netted $45 profit. Loves it long term, hold forever.

They just reported. They grew revenues by 16%, slightly beating, revenue growth is driven by higher subscription prices, and operating margins beat slightly. Blockbuster releases included season 2 of Squid Games and the new Tyler Perry movie. They also gave great guidance for this quarter. But expectations were sky high, and audience engagement as up only 1% this year, disappointing the street, which thought future growth could slow. They sold off, because shares came into the quarter too hot. The conference call outlined exciting growth to come, including use of AI they just started to use in content. Remains best of breed in streaming.

Leader in the streaming market. Content library continues to grow, with local content in different countries, and that's supporting rapid international growth. Revenue for fiscal 2026 expected to exceed $50B USD, driven by global expansion. Ad-supported tier has been very successful, as has password-sharing crackdown. Strong financial performance, with revenues accelerating and margins expanding. 

40x forward PE, but 27-30% expected growth rate. Tech company, but great valuation. No dividend.

Momentum will continue. It's come back from recent lows.

Technicals show a retracement back to the April low and aligns with consolidation in early May before it broke out. So, now is the time to buy.

Up 30% this year, hitting on all cylinders. Trades defensively. The consumer is strong and ads are doing well.