What's Going On With Netflix Stock?

Netflix Inc NFLX shares are trading marginally lower by 0.79% to $705.45 during Thursday’s session. Shares of several streaming companies are trading lower after Amazon.com Inc AMZN announced they will ramp up their Prime Video advertising spend.

What To Know: This development positions Amazon as an increasingly formidable competitor in the ad-supported streaming space, raising concerns about Netflix’s ability to maintain its leadership in an industry where advertising revenue is becoming a key battleground.

Amazon's move to increase the number of ads on Prime Video reflects its broader strategy to enhance its already substantial $38 billion advertising business. Despite introducing ads just eight months ago, Amazon has seen little impact on subscriber numbers, suggesting that its user base is more tolerant of ads than initially expected.

This trend could be particularly concerning for Netflix, which only recently launched its ad-supported tier and has been battling to find the right balance between maintaining subscriber satisfaction and increasing ad revenue.

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What Else: The competitive threat posed by Amazon is multi-faceted. Not only is Prime Video reportedly undercutting Netflix on advertising pricing, making it a more attractive option for marketers, but the service also boasts a global reach of 200 million monthly viewers, including 19 million in the UK.

These figures rival Netflix's vast subscriber base and indicate that Amazon's advertising platform is gaining serious momentum. For Netflix, this represents a potential loss of both advertisers and revenue growth, especially as companies seek to optimize their ad budgets by choosing platforms that offer both affordability and reach.

Adding to the competitive pressure, Amazon has emphasized its intention to maintain "meaningfully fewer ads" than rivals like Netflix and Disney+. This could further erode Netflix's market position, as the streaming giant may be forced to reevaluate its ad load to remain competitive, potentially risking a negative reaction from subscribers.

Netflix has already experienced some hesitation from users when it introduced its ad-supported tier, and Amazon's approach could set a new standard for ad tolerability in the industry.

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Is NFLX A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Netflix‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Netflix does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Netflix will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

According to data from Benzinga Pro, NFLX has a 52-week high of $725.26 and a 52-week low of $344.73.