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Netflix Outperformed the Market and FAANG Stocks in 2018


Jan. 3 2019, Updated 2:39 p.m. ET

Netflix rose 33.1% in 2018

Driven by its strong content portfolio, Netflix (NFLX) outperformed the market indexes as well as the so-called FAANG stocks—Facebook (FB), Amazon (AMZN), Apple, Netflix, and Google, a subsidiary of Alphabet (GOOGL)—in 2018.

The Dow Jones Industrial Average fell ~6% in the year, while the S&P 500 Index and the tech-driven NASDAQ Composite Index (QQQ) fell ~7% and 5.3%, respectively. Netflix was the best-performing FAANG stock and rose 33.1% in 2018. Amazon rose 26.3% in the year. Facebook, Apple, and Alphabet fell ~27.7%, 7.1%, and 2.6%, respectively, in the year.

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Factors that drove Netflix’s growth

Netflix is a leader in the streaming services market and is aggressively spending billions of dollars on original films and programming. Netflix’s strong content portfolio is helping it win subscribers globally. In the third quarter of 2018, Netflix’s global subscriber base reached 137.1 million, and it’s expected to reach 146.5 million as of the end of the fourth quarter. Netflix is also targeting the rollout of 1,000 original TV shows and movies as of the end of 2018.

During the third quarter, the company reportedly released ~676 hours of original programming in the United States, roughly 135% higher than in the previous year’s quarter, according to Cowen and Company. Netflix exceeded 500 hours of original programming for the first time in the third quarter.

In the quarter, the company debuted new seasons of the dramas Ozark and Orange Is the New Black and the animated comedy BoJack Horseman as well as the new series Insatiable and Maniac. The streaming king also released original films such as Father, Sierra Burgess Is a Loser, and To All the Boys I’ve Loved Before in the quarter. It also recently released Roma, which won the award for the best movie of the year from the New York Film Critics Circle and also won the Golden Lion Award.


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