The streaming market is getting evermore crowded, but two experts say there are winners emerging.
Chantico Global CEO Gina Sanchez said this week that Disney looks best positioned in the space.
“In terms of growth and where you would put your money, now you have to go with some of the newer entrants,” Sanchez said. “And of the newer entrants, I like Disney+.”
Disney launched its streaming service back in November, and had amassed more than 54 million subscribers by the beginning of June.
“It has the most solid content,” Sanchez added. “It’s content that’s extremely valuable and it’s about to fall off all of the [other] platforms in September. So I think that that as they consolidate their position as a strong content provider, that’s going to drive significant growth here in the near term.”
But the popular Disney+ platform aside, Piper Sandler’s Craig Johnson likes Netflix.
“We’d definitely be a buyer [of Netflix],” Piper Sandler’s chief market technician said. “I’ll observe my children. I come home, they’ve got Netflix on multiple times a week. I look at this chart, it looks like to me just to be a little 7% correction within the context of a longer uptrend.”
Netflix dropped -7% last Friday after weaker than expected earnings and disappointing subscriber growth projections, and is down nearly -10% over the last week.
Even with the less-than-great earnings results, analysts are still bullish on Netflix shares.
Morgan Stanley’s Benjamin Swinburne pointed out that this marked the first quarter of substantial free cash flow generation since Netflix shifted from DVDs by mail to streaming over a decade ago.
“When the dust settles,” Swinburne said, “we expect 35 million net ads and positive free cash flow for the year – reinforcing our confidence in long-term cash operating leverage in the business.”
And Deusche Bank analyst Bryan Kraft added that Netflix continues to dominate the subscription streaming business.
“Netflix continues to be an attractive long term growth sorry within media as it maintains its leadership position as the preeminent premium global subscription video on demand service and Netflix benefits from secular adoption of streaming and investment into the company’s expanding content portfolio,” Kraft said.
The streaming pioneer isn’t the only stock in the space Johnson likes. He’s also got his eye on Roku (NASDAQ: ROKU).
“Here’s a stock that has reversed a longer term downward trending price channel,” Johnson said. “I like those kind of downtrend reversals. Something is clearly more positive there, and we’d also be a buyer of that stock here on that downtrend reversal.”