 With the recent tech sell off, many investors are shunning away from long-term darling like Netflix because now they see Netflix as an old granny, barely have the ability to grow. As a result, streaming giant like Netflix has actually fallen over 40% from its all-time high since last year November. However, was the fall in price justified or was it more like an overreaction? If you're wondering whether Netflix is a great business to invest in during this market condition, then keep on watching. Hi, this is Chloe and welcome back to my channel. The only one place for you to learn about stocks, investing as well as options. If it's the first time of you coming to my channel, remember to hit the subscribe button as well as the notification bell so that you will not miss out any of my future investment insights. An early thumbs up is also appreciated because it will tell you to algorithm that you find this video helpful and it will actually help to push out to more people to inspire them to start investing safely. Netflix begins as a mail-order DVD rental service before involving into this streaming giant that it is today. Its service is now available to over 190 countries in the world, excluding China, Crimea, Syria, and of course, North Korea. As Netflix has grown in size and popularity, its first-mover status has given it competitive advantage over the others. Right now, it has more than 222 million subscribers worldwide, making it the most popular streaming service in the world. So how did this company manage to grow its subscribers so rapidly? Well, it all boils down to data analytics of the subscribers viewing habits and thus enabling Netflix to provide content that subscribers love to watch. Over the years, Netflix has gathered immense insights into subscribers' preference and interests, what it shows to viewers enjoy, who are the peeling directors as well as actors, and that's why it becomes so natural for Netflix to actually use all these insights to produce its own original content so that it has the ability to differentiate itself from all these competitors out there. The television series House of Cards starring Kevin Spacey and produced by David Fincher is a good example. The recent global hit Squid Game is another example of how popular series can actually attract a lot more subscribers. And make a guess, how many subscribers has Netflix gained ever since the rollout of Squid Game? 438 million subscribers. Due to its strong data analytics and recommendation algorithm, people around the world are now spending 3 hours a day binge watching Netflix content. And think about it, the more people spend time on Netflix, the more data and insights that Netflix will gather, and that's why they're able to use all these insights to convert into better content. And thereby reinforcing this virtual cycle to make Netflix even stronger. Overall, in 2021, Netflix series accounted for 6 out of the 10 most searched shows globally, while their films represented 2 out of the top 10. The demand translated to strong financial result last year Netflix revenue rose 19% to 29.7 billion, its operating margin jumped 250 basis points to 21%, and its profit soared 85% to 11.24 per diluted share. While Netflix has built up its strong competitive advantage, it still has more room to grow. Currently, there are more than a billion broadband households in the world, but more and more people see broadband as unnecessary and not cost-effective, and that's why court cutting is on the rising trend, giving it more room for video streaming services like Netflix to grow. Secondly, Netflix has ability to raise price. In fact, Netflix has increased price several times over the years. The chart below shows that Netflix has ability to increase its average revenue per user over time across various markets. In fact, the most recent price hike in January this year is a six times since 2014, making Netflix the most expensive streaming subscription in the US. It just shows Netflix has pricing power, and despite the fact that it has increased price six times, subscribers are willing to pay more due to its convenience and amazing content. As Netflix is able to increase price as well as its subscriber base, it really provides much more predictability and more cash flow to this business because it runs on subscription business model. Most importantly, the management of the company is just simply excellent. Reed Hastings founded Netflix back in 1997, and today he's still the co-CEO of the company. Under his management and forward-thinking vision, he literally pivoted the traditional DVD by male business model to the streaming giant that we know of today. In fact, he also has significant skin in the game, only more than 8 million shares. And with the recent price tank, Reed Hastings just purchased another $19 million worth of shares, showcasing that his confidence about the business future and the potential undervalued price the market is giving right now. Apart from him, famous hedge fund titan Bill Augman also purchased over a billion dollars worth of shares, now making him one of the top 20 shareholders of Netflix. But is Netflix really undervalued right now? Let's go in to take a look. In my opinion, at the current market share price, Netflix is presenting an enormous buying opportunity. As you can see, the past five-year PE ratio is more than 130 times, while currently the PE ratio of next weeks has dropped to slightly above 34 times. On the technical side, Netflix is also currently at the great support level, and if you look at the chart closely, you will realise that the stock price has dropped back to the pre-COVID-19 level. And if you think about it, it's as if the market is perceiving Netflix has not grown over the past two years, which is ridiculous. This is the exact same situation that Meta is facing right now. And I actually use this great opportunity to buy more Meta shares as well as use options to accelerate my return. If you want to find out why my soul bullish on Meta, then do check out my video right here as I deep dive into this company. On top of that, I also use options to accelerate my return by generating over $500 in just less than a week. But before you go, let me share with you the potential risk of investing in Netflix right now. Risk number one, there's growing competition from big players like Apple, Amazon, as well as Disney. With giant companies like this trying to compete with Netflix, now the market is presented with so many other choices out there, so Netflix may not be the automatic choice for so many people. In fact, Netflix projected that from the next quarter, their subscriber growth is 2.5 million. And this is in stark contrast to the growth rate of what Netflix had in the past four years. So indeed, Netflix has seen its slowest growth in years. But to be fair, we also have to take into consideration that COVID-19 has really accelerated the subscriber growth rate and it will be unreasonable to assume that the growth rate will sustain forever. Risk number two, the need to continue to pour in a lot of resources and money to produce its original content. Today, Netflix's success is pretty much depending on whether the company has ability to create more original content to retain and attract more subscribers. Last year, the company spent over $17 billion on content and the company must continue to reinvest more cash to produce great content in order to sustain its competitive advantage. In the event that this pipeline actually failed due to the tight schedule or Netflix is unable to produce more compelling content, then subscribers might just switch to other competitors. So with all the competitive advantage as well as the risk that Netflix is facing, what do you think about Netflix's current share price right now? Do you think it's a buy, it's a hold or it's a sell? Let me know in the comment below. If you think today's video is helpful, remember to give it a thumbs up as well as shout to your friends so that you can inspire them to start investing safely as well. And if you are also curious to find out exactly how options can help you to accelerate your return regardless of the market condition, then do join me in my upcoming Options Foundation class where I'll be sharing with you three powerful option strategies for you to make money consistently regardless of the market condition. All you need to do is click on the link below to sign up for your free sponsor. Last but not least, if you want to have more up-to-date investment insights, then do join my Telegram channel as well because I constantly post my updates over there as well. With that, happy investing and I will see you in the next video. Mada, likes you, bye bye. And thereby reinforcing the virtual cycle, the virtuous. And with the recent price tank, we have seen just purchase another month.