Jim Cramer - Mad Money Netflix Inc. NFLX-Q BUY ON WEAKNESS Jun 25, 2025

Then buy a piece of it, a little, then buy more if it goes down. NFLX may be the best-growing stock in the market.

Meets a lot of his criteria but one -- it's not actually a capital-light business. Spends a lot on developing new content. A compounder. Well, and frugally, run. Investors would do well to read about the culture and the CEO. Dominates the space, market leader. Quite a bit of direct competition.

If you got in at favourable prices, stick with it. Strong company. One of the biggest mistakes investors make is that they "interrupt compounding unnecessarily" (paraphrased from Charlie Munger).

The price target was raised today. Is up 36% this year. It's a permanent compounder. They still own the streaming space, are #1. Looks great. Has so many tailwinds. Is recession resistant.

Is the leader in streaming. But you have to be a little wary of film accounting--you put the cash out front, but accountants will amortize that cost over time. So, earnings don't really reflect the true cash impact on an expanding portfolio of new releases. For a long time, NFLX was challenged on a cost basis, nor producing free cash. This is past and are now producing free cash.

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.

Was upgraded today. Up 38% this year. Operating margins were up 32% last quarter and EPS +25%. However, US growth was only 9%. So, there's lots of room to run internationally. Continues to like it. Expenses will this quarter though will content to come.

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.