On the basis of new subscribers, Disney was able to claim a small victory in its battle against Netflix as Disney+ recorded more than 50 million subscribers worldwide. But on the basis of stock price, Netflix is able to declare itself–albeit shockingly–more valuable than The Walt Disney Company. Four times more valuable, to be exact.
After hitting record highs three days in a row, Netflix’s stock (NASDAQ: NFLX) soared to $430/share. As of mid-day April 15, 2020, that is where it stands. Disney is currently sitting at ~$103/share.
But Netflix appears to be climbing even more as Pivotal Research Group analyst Jeff Wlodarczak raised Netflix’s price target from $425 to $490.
According to MarketWatch,
The price-target change came as Wlodarczak “materially” raised his subscriber estimates, citing “likely higher gross subscribers and lower subscriber churn boosted by global consumer ‘stay-at-home’ orders around COVID-19.” He thinks the crisis is “cementing Netflix’s global [direct-to-consumer] dominance” as the company spent heavily to create a robust library of programming. “The company appears to operate in a virtuous cycle, as the larger their subscriber base grows (and their [average revenue per user] increases) the more they can spend on original content, which increases the potential target market for their service (and reduces existing subscriber churn),” he wrote.
But Netflix has an unfair advantage at this particular time. All it is is a direct-to-consumer service. The Walt Disney Company’s streaming service, Disney+, is showing incredible success on its own. However, it is becoming a platinum crutch as it remains just one part of a suffering whole that includes stalled movie studios, a major sports network with no live sports to cover, 14 major theme parks and countless resort hotels currently closed due to the pandemic.
Netflix was made for a pandemic or any other crisis that would require a “shelter in place” ordinance–especially, while it continues to churn out original content like “Tiger King.” Disney was not. Yet, considering the success Disney+ has compared to Netflix, it would be interesting to see how the new platform would do on its own. Perhaps, it too would see a meteoric rise like Netflix shares, seeing its stock price near $500/share.
According to Variety, Netflix will submit its first quarter 2020 earnings report next Tuesday, April 21, after market close. Many analysts expect the company to report a total paid net more than $7 million worldwide.
Disney+ and Netflix are only two of the direct-to-consumer streaming services now available. Those others include HBO Max, Hulu, and Amazon Prime.