Netflix Stock Hits Record High—First Since 2021—After Ads, Password Crackdown

Topline

Netflix tallied its first all-time high share price in nearly three years, capping a lengthy return to glory for the entertainment giant amid password crackdowns and a successful ad-supported subscription—a recovery that has evaded other streamers.

Key Facts

Netflix shares closed at $698.54, topping the prior high of $691.69 set Nov. 17, 2021.

Spurring Tuesday’s 1.5% rally was the company’s announcement it secured a 150% year-over-year increase in upfront advertising commitments, an encouraging sign for its fledgling ad-supported subscription tier.

Now up more than 300% from its May 2022 nadir, Netflix stock is the only major publicly traded streamer to recapture the all-time high share prices achieved during the depths of the COVID-19 pandemic, when investors grew enamored with sky high subscriber growth amid stay-at-home orders.

Shares of other streamers have all fallen from their 2021 highs: Disney+ parent Disney (down 56%) Max parent Warner Bros. Discovery (down 90%) and Paramount+ parent Paramount (down 89%).

Peacock parent Comcast (down 35%) and music streamer Spotify (down 11%) are also well off of their 2021 highs, though they two don’t make for easy comparison with Netflix since Comcast makes most of its money from its internet services and Spotify is an audio company.

Contra

Netflix stock holds major bragging rights over its media peers, but it has still underperformed the broader market, as the S&P 500 has returned 25% since Nov. 17, 2021, as Netflix gained 1% as it climbed back to the mountaintop.

Big Number

$300 billion. That was Netflix’s market capitalization at Tuesday’s close, more than the combined valuations of Disney, Paramount, Spotify and Warner Bros. Discovery.

Key Background

Netflix’s 2022 selloff coincided with the company’s first quarterly subscriber losses since 2011, with the company losing half of its market value just in April 2022. That was also the year of Netflix’s first year-over-year profit decrease since 2012 in 2022, while a broader tech stock selloff as interest rates rose furthered the damage. Steady subscriber growth, following a password sharing crackdown and the rollout of its ad-supported tier, have caused investors to buy back into Netflix, which just reported record quarterly revenues of nearly $10 billion with an all-time high 278 million global subscribers.