Netflix (NFLX) stock is notoriously volatile. And while some nimble traders have surely used NFLX's gut-wrenching swings to their advantage over the years, plenty of punters with less fortunate timing have just as assuredly had their faces ripped off.
The company's truly long-time shareholders are in another class entirely. Those who bought stock in the streaming media giant two decades ago – and then held and held and held through NFLX's many vertiginous ups and downs – have enjoyed outstanding returns vs the broader market.
As successful as Netflix has been – and may continue to be – it remains at its core a somewhat insecure business model. (Just look at NFLX stock's volatility for proof.)
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
On the plus side, Netflix is the king of on-demand streaming entertainment, serving TV series, films and games via 300 million paid memberships in more than 30 languages and 190 countries. It furthermore lays claim to arguably the best brand in the industry.
On the downside, Wall Street puts relentless pressure on the company to grow its subscriber base.
As a consequence, Netflix must spend tens of billions of dollars on content to attract and retain viewers.
Competition from the likes of Walt Disney (DIS), Apple (AAPL), Paramount (PARA), Amazon.com (AMZN) and others have forced Netflix to splurge on efforts to acquire, license and produce content over the past several years.
After peaking at $17.7 billion in 2021 – a whopping 50% increase vs the previous year – Netflix managed to cut spending on content.
The company spent about $13 billion on content in 2023, another $16 billion for programming in 2024 and plans to spend $18 billion in 2025.
Investors are counting on the company to keep leveraging those investments into the kind of outsized subscriber growth NFLX enjoyed at the tail end of last year.
After all, nothing hurts NFLX stock like losing subscribers. Recall that in April 2022, shares plunged after Netflix reported its first loss of subscribers in more than a decade. The company shed in excess of $50 billion in market value overnight.
It's also worth recalling that Netflix stock was already in a steep decline at that point. Sluggish subscriber growth and rising costs had long knocked it off its perch. Indeed, shares topped out above $690 back in November 2021 before plummeting below the $200 price point by mid-2022.
It's been a long climb out of that hole, but NFLX stock is back to trading close to record levels.
The bottom line on Netflix stock?
Which brings us to what you would have today if you had invested $1,000 in Netflix stock 20 years ago.
The good news is NFLX stock has clobbered the broader market over the long term, generating an annualized total return of 34.4% over the past two decades vs 10.6% for the S&P 500.
To see what that looks like on a brokerage statement, check out the chart below and you'll see that if you invested $1,000 in NFLX stock 20 years ago, today it would be worth about $389,000.
By comparison, $1,000 invested in the S&P 500 over the same time frame would theoretically be worth about $7,500 today. (The broader market's return includes dividends, which Netflix doesn't pay.)
As for where Netflix goes over the next 12 to 18 months, the Street's consensus recommendation on this communication services stock is highly bullish.
Of the 46 analysts issuing opinions on NFLX stock surveyed by S&P Global Market Intelligence, 22 rate it at Strong Buy, six say Buy, 16 call it a Hold and two have it at Sell. That works out to a consensus recommendation of Buy, with solid conviction to boot.
More Stocks of the Past 20 Years
- If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Amazon Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Markets Are Quiet Ahead of Fed Day: Stock Market Today
Investors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
5 Multibagger Stocks With Amazing Returns in 2025multibagger stocks As the term suggests, multibagger stocks multiply your money – gains of 1,200%, for example. Here's where to look for that kind of performance this year.
-
Investing Freebies: Perks You Get for Owning These StocksWhile the biggest investing returns come over the long term, these companies offer instant gratification for investors with several freebies and perks.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
