We recently published a list of 8 Best Robinhood Stocks to Buy According to Analysts. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against other best Robinhood stocks to buy according to analysts.
Morgan Stanley Wealth Management has announced quarterly retail investor pulse survey results. The majority of investors’ views were bullish. Investors began the year on the bullish (58%) note, in line with last quarter (59%). Furthermore, the results also revealed that around 2 out of 3 investors (64%) saw the market rising by the end of the quarter.
What’s On Retail Investors’ Minds?
Morgan Stanley Wealth Management’s survey revealed that inflation has been the top worry for investors’ portfolios at 45%, almost in line with the last quarter at 46%, with market volatility at 24% coming out to be the second. Notably, the concerns related to the new administration declined 13 percentage points since the last quarter. Furthermore, around 3 out of 5 (59%) of investors see that the broader US economy remains healthy. Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley, stated that with any new administration taking power, the potential policy changes can bring uncertainty in the broader markets. That being said, investors are optimistic and resilient amid a soft start to the new year.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Current Trends in Retail Investing
Retail outflows from the US equities increased to ~$4 billion over the previous 2 weeks due to the uncertainties related to tariffs and increased economic concerns, which resulted in a strong pullback in the S&P 500, reported CNBC, while quoting data from Barclays. Rob Austin, director of research at Alight Solutions, says that if people tried to buy the dip, there would have been evidence hinting at the increased buying of the large-cap equities. On the contrary, people are selling large-cap equities. Austin believes that this seems to be a bit of a reactionary trading activity.
CNBC, while highlighting the comments made by Venu Krishna (Barclays head of U.S. equity strategy), reported that there remains sufficient capacity for the retail investors to further disengage from the broader equity market. Notably, Barclays’ proprietary euphoria indicator exhibited that the sentiments are down to the levels that were seen around the time of the US election back in November, but remain elevated by historic standards. The increased sell-off came as American households remained more sensitive than ever to the significant volatility in the broader equity markets.
Our Methodology
To list the 8 Best Robinhood Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist the stocks trending on Robinhood. We also took help from the Robinhood Investor Index. Next, we chose the ones that analysts see significant upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of March 17. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A home theater with family members enjoying streaming content together.
Netflix, Inc. (NASDAQ:NFLX)
Average Upside Potential: ~14.3%
Number of Hedge Fund Holders: 144
Netflix, Inc. (NASDAQ:NFLX) entertainment services. MoffettNathanson upped the company’s stock to “Buy” from “Neutral” with a price objective of $1,100, up from $850. As per the firm, its ability to monetize the engagement remains underappreciated. The upgrade stemmed from Netflix, Inc. (NASDAQ:NFLX)’s strong user engagement, which can fuel future profitability. As per the firm, the company remains well-placed to generate healthy advertising revenue over the upcoming years, aiding margin expansion. This is expected to stem from a combination of ad revenue growth and the growth in subscription revenues.
Elsewhere, Bernstein analysts maintained an “Outperform” rating on Netflix, Inc. (NASDAQ:NFLX)’s stock, with a steady price target of $1,200.00. As per Laurent Yoon, an analyst at the firm, the company’s revenue growth, mainly driven by subscriber additions, continues to outpace the content spending increases. Yoon believes that Netflix, Inc. (NASDAQ:NFLX)’s fundamental business drivers are strong and can support continued growth. The analyst’s rating stems from the company’s ability to navigate through short-term challenges and use its healthy subscription growth as well as margin expansion for long-term success.
RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q4 2024 investor letter. Here is what the fund said:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.
The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”
Overall, NFLX ranks 7th on our list of best Robinhood stocks to buy according to analysts. While we acknowledge the potential of NFLX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than NFLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
