Holding the so-called ‘FAANG’ stocks can leave you pretty sweaty these days.
The exclusive class of world-dominating tech companies whose market cap back in March 2019, was ~$3 trillion, has seen better days.
While P/E ratios, earnings, net revenue retention, and other valuation metrics matter a great deal, I want to call out an important variable a lot of investors and market enthusiasts overlook: Brand
If we just look at “brand” (or “likability” if you prefer) as a standalone, Netflix has outperformed, eluding the criticism and/or scandals that have plagued the other FAANG’s, such as privacy intrusions (Meta and Google), elitism and a “walled garden” mentality (Apple), links with depression (Meta / Facebook), labour violations (Amazon), and promotion of hatred and propaganda (Meta/ Facebook again— honestly, there’s not enough room here to slam Meta/Facebook properly)…
It’s true, that in 2004, Netflix was sued for false advertising in claims of “unlimited rentals” with “one-day delivery” – and yes, there have been some copyright violations.
But overall, Netflix has steered well clear of controversy to focus on its core objective of filling everyone’s leisure time.
Despite today’s broad sell-off of big tech, and a near 70% drop in stock price this year alone, Netflix has still generated a near 25% return over a five-year period.
As competition heats up, how the company fairs relative to its streaming peers remains unclear.
But, what appears solid, is the company’s respect for its own brand reputation.
And, “brand rep” remains an important pillar to attracting, and retaining customers long term.