Streaming has grown exponentially during the COVID-19 pandemic. The consequential shift in consumer behavior made traditional media companies rethink strategy. They realize that linear TV may no longer be the way to attract consumers and generate ad revenue.
However, changes have occurred since the pandemic. In fact, streaming numbers aren’t as high as they once were. And, competition has tightened up, forcing early adopters to change their business models or increase their offerings. More and more companies are throwing in their streaming service bets, which can only be good for consumer choice. The industry is poised for additional growth.
So, let’s examine some of the three best streaming stocks to buy right now.
Spotify Technology SA (SPOT)
Luxembourg-based Spotify Technology SA (NYSE:SPOT) is a digital music streaming company. Best known for shaking up the music industry, SPOT changed the way artists are paid for their music.
So, instead of album sales and performances, Spotify pays artists based on the number of song streams. This enables artists to earn more money, which levels the playing field for smaller artists.
Also, the platform provides its users with ready-made playlists by experts and fans. Additionally, it allows users to discover new tracks while building their collections. Its Spotify Premium offers additional features like ad-free music, unlimited skips, and offline listening.
Recently, SPOT reported a solid Q3 by turning a profit for the first time in over a year with a $0.36 EPS and a surprise of 280%. This is crucial as the company has been making strides in reducing costs. Plus, it is strategically investing in podcasts while implementing price hikes. And it’s safe to say that it’s starting to pay off.
Additionally, Spotify Technology SA garnered 16% more premium subscribers and 26% more monthly active users over the quarter. All this pushed the stock to a 52-week high, and analysts remain bullish about its prospects.
Netflix Inc. (NFLX)
Next up is probably one of the most popular streaming companies that started the “binge-watching” era of viewership.
Netflix Inc. (NASDAQ:NFLX) revolutionized the industry by bringing an entire series season to its audience on a single release day. Hence, this move has shaped the way consumers consume content. Also, the company revolutionized the TV industry with its strong “Netflix Originals” offerings.
Additionally, NFLX’s business model offers various streaming membership plans that vary depending on the country. And it can be accessed by a single user or a family. Members can stream via TVs, computers, and mobile devices for disruption-free binge watching.
Netflix’s third-quarter report exceeded expectations by hitting $8.5 billion in revenue, a 7.8% increase year over year (YOY). Netflix raised expectations for FY23 operating margins to 20% and a higher free cash flow of approximately $6.5 billion. Also, the company’s Q3 had a strong content slate. They offered new originals like the live-action adaptation of One Piece, Dear Child, and Sintonia, increasing viewership.
This strong track record of growth and increase in investments in content makes Netflix a top streaming stocks to buy.
FuboTV Inc. (FUBO)
FuboTV Inc. (NYSE:FUBO) focuses on sports, with live TV-streaming of tens of thousands of live sporting events. Also, FUBO provides news and entertainment content annually.
They offer a base plan, Fubo Pro, with Nielsen-rated networks and dozens of sports, entertainment, and double-digit news channels. Additionally, subscribers can add premium channels and upgrades that provide enhanced, interactive experiences.
FuboTV reported a strong third quarter. Revenue from North America increased by 43% YOY, achieving a record number of 1.477 million paid subscribers, equivalent to 20% growth YOY. Further, the company has substantially progressed to meet its 2025 positive cash flow goal. In fact, FUBO has improved its free cash flow, net loss, and adjusted EBITDA for three straight quarters. Raising 2023 guidance, it now expects a 34% YOY revenue growth and 10% YOY growth in paid subscribers for North America. As such, analysts recommend it as one of the top streaming stocks to buy.
And, according to Fubo’s CEO and co-founder David Gandler, the company aims to take advantage of the competitive streaming landscape. They plan this by aligning with market trends, personalizing user streaming experiences, and being a super aggregator.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
