Send me real-time posts from this site at my email

Why Netflix Stock Jumped Today

What happened

Shares of Netflix (NASDAQ: NFLX) rose 5.5% on Thursday, following news that the streaming leader's brand got a big boost during the coronavirus pandemic, as well as rumors it was considering price increases.

So what

A recent study by the branding agency MBLM showed Netflix received the second-highest increase in usage during the COVID-19 crisis, behind only video conferencing specialist Zoom Video Communications.

MBLM surveyed 3,000 U.S. consumers regarding their experiences with 100 brands across 10 industries. "Brands drive business, and they in turn are the fuel of our economy," MBLM managing partner Mario Natarelli said in a press release. "As we look to recovery, we wanted to reveal which brands consumers are bonding with now and why."

MBLM will release the full results from its Brand Intimacy COVID Study next week.

Netflix's stock rose sharply on Thursday. Image source: Getty Images.

MBLM's study follows comments from Jefferies analyst Alex Giaimo earlier in the week suggesting that Netflix may soon raise its subscription prices. Giaimo estimates that the streaming giant could generate as much as $1 billion in additional revenue by increasing its prices by $1 to $2 in either its North America segment or its Europe, the Middle East, and Africa (EMEA) segment.

Now what

MBLM defines brand intimacy as "the emotional science behind the bonds we form with the brands we use and love." With Netflix's brand intimacy as high as its ever been, thanks in part to the COVID-19 crisis, the company could likely raise prices without suffering much in the way of subscriber losses. In turn, most of the additional revenue produced from a potential price hike could fall to its bottom line, boosting its stock price in the process.

10 stocks we like better than Netflix
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Netflix wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 24, 2020

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix and Zoom Video Communications. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue