Netflix has soared past Walt Disney in market value on Thursday, taking the title of most valuable media company from the film, TV and theme-park giant.
Shares of the video streaming service rose as much as 2% to US$351.48 in New York, and the company’s market cap topped $152bn, exceeding the value of Disney, which was down 1.6%.
The advance underscores the high confidence investors have in the future of the world’s largest paid online video service. Netflix’s value has surged from about $20bn at the end of 2014 to surpass the world’s most powerful media giants, Comcast and Disney, this week.
Still, Netflix’s revenue remains well below that of the media titans. Comcast is the largest cable provider in the US and parent of NBCUniversal, which owns film studios, pay-TV networks and theme parks. Its sales totalled $84.5bn last year. Disney, with 2017 revenue of $55.1bn, owns ABC and ESPN, two of the most valuable TV networks in the US, along with its namesake parks and resorts.
Netflix’s sales are forecast to grow 38% to $16.1bn this year, based on analysts’ estimates, as the company signs up more customers for its global on-demand video service. Subscribers totalled 125m as of 31 March.
The Los Gatos, California-based streaming company is spending billions on programming to attract new viewers, prompting concerns among some analysts. Netflix will lay out about $8bn on movies and shows in 2018, and forecast $3bn-$4bn in negative free cash flow.
Investors have forgiven the cash burn so long as the company keeps growing. Netflix is the top performing stock on the S&P 500 this year, and has led the index in three of the past six years. Disney is down about 5.5% this year, while Comcast has declined 21%.
Disney is responding to the threat posed by streaming services by moving more of its programming online. The company introduce a Web-based ESPN subscription service and has plans for an additional offering. Comcast has begun selling the Netflix service as part of its cable packages. — Reported by Lucas Shaw, with assistance from Rob Golum and David Russell, (c) 2018 Bloomberg LP