Jim Cramer’s Top 5 Stock Picks for 2023

3. Netflix, Inc. (NASDAQ:NFLX)

YTD Stock Performance Through November 22: +65%

Jim Cramer has been bullish on Netflix, Inc. (NASDAQ:NFLX) throughout 2023. In February 2023 Cramer said about Netflix:

“You got the pain, you get the gain. Stick with it.”

Netflix, Inc. (NASDAQ:NFLX) shares have gained about 65% year to date.

After Netflix, Inc. (NASDAQ:NFLX)’s first quarter results, Cramer reiterated in a program on CNBC that Netflix stock was a bargain.

RiverPark Advisors made the following comment about Netflix, Inc. (NASDAQ:NFLX) in its Q3 2023 investor letter:

“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top detractor in the quarter on weaker than expected reported and guided revenue, despite 2Q subscriber growth that was well above expectations (+5.9 million versus estimates of +2.1 million). The company’s subscriber growth re-accelerated following the company’s crack down on password sharing, and the rollout of the advertising supported subscriber offering known as the Ad Tier, but the average revenue per user came in below expectations and is expected to remain muted in the near term. NFLX reiterated expectations for full year 2023 operating margins of 18-20%, and guided free cash flow to at least $5 billion, up from prior guidance of $3.5 billion. Despite the positive momentum in the company’s business, market participants took comments from management at a recent conference to mean revenue growth may be slower in the coming years than expected. This was not our interpretation of these comments.

In fact, 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 improved operating margin to more than 25% (revenue grew 3% for 2Q23 and operating margin was 22.3%, up from 13% in 2019). We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.”