Disney's Technological Leap to Challenge Netflix in Streaming Profits

Disney Develops Tech to Rival Netflix and Boost Streaming Profits: Report - Netflix (NASDAQ:NFLX), Walt Disney (NYSE:DIS)

Bob Iger emphasizes algorithm improvements to enhance content recommendations. Walt Disney Co DIS strives to keep its streaming subscribers engaged longer on its platforms, including Disney+, Hulu, and ESPN+. The entertainment giant is introducing new features to increase user engagement and reduce subscriber churn. Disney is focusing on a metric known as "hours per subscriber" to enhance viewer engagement, the Wall Street Journal reports. Also Read: Disney Suffers Major Data Breach As Hackers Leak Internal Slack Data: Report In a May earnings call, CEO Bob Iger described Netflix as the "gold standard" in streaming and emphasized the importance of developing technology to rival Netflix Inc NFLX and boost streaming profitability. Disney is developing personalized algorithms to recommend content based on user preferences, customized promotional art, and emails prompting users to finish incomplete series. The company is also creating pop-up live channels to entertain viewers without requiring them to browse for content. These features are expected to roll out within six months. In May, Walt Disney reported second-quarter revenue growth of 1% year-on-year to $22.08 billion, marginally missing the analyst consensus estimate of $22.11 billion. Adjusted EPS of $1.21 beat the analyst consensus estimate of $1.09. Disney expects a fiscal 2024 adjusted EPS growth target of 25%. In April, Netflix reported first-quarter revenue growth of 14.8% year-on-year to $9.37 billion, beating the analyst consensus estimate of $9.28 billion. EPS of $5.28 beat the analyst consensus estimate of $4.51. Netflix added 9.33 million paid net new subscribers in the first quarter, reaching total subscribers of 269.60 million, up by 16.0% year-over-year. Disney serves nearly 230 million streaming customers worldwide through its various services. Price Actions: DIS shares are trading lower by 1.39% at $97.11 at the last check on Wednesday. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo via Shutterstock Market News and Data brought to you by Benzinga APIs

Zacks Investment Ideas feature highlights: Netflix and Disney

Time to Buy Netflix's (NFLX) Growth Ahead of Q2 Earnings Netflix shares have climbed +34% this year and the rally may continue with the streaming giant expected to post substantial growth when it reports its Q2 results on Thursday, July 18. Holding on to the title of streaming king ahead of Disney, let's dive into why now is a good time to buy Netflix stock. Compelling Subscriber Growth Netflix currently has over 270 million paid subscribers staying firmly ahead of Disney which has roughly 150 million customers in its subscriber base when including Disney+, ESPN+, Hotstar, and Hulu. For the second quarter, Netflix is thought to have added 5.41 million subscribers, a slight decrease from the 5.89 million additions in the same period last year. However, it's noteworthy that Netflix added 9.32 million subscribers during Q1 which blasted expectations of 5.73 million (Surprise of 3.59 million) and climbed from 1.75 million additions in the comparative quarter. Q2 Financial Expectations Taking advantage of its subscriber growth, Netflix's Q2 sales are projected to rise 16% to $9.53 billion. Even better, earnings are expected to soar 43% to $4.70 per share versus $3.29 a share in Q2 2023. Notably, Netflix has exceeded earnings expectations in three of its last four quarterly reports posting an average earnings surprise of 9.26%. Monitoring Netflix's P/E Valuation Correlating with its expansion, Netflix shares have become more reasonably valued trading at 35.8X forward earnings compared to its five-year high of 108.3X while offering a slight discount to the median of 40.6X. Bottom Line Considering its more reasonable P/E valuation now looks like an advantageous time to invest in Netflix's monstrous growth. Furthermore, NFLX tends to spike when Netflix beats earnings expectations but would be a viable buy-the-dip candidate on a selloff as an intriguing investment for 2024 and beyond. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.