Netflix has outperformed the market by a significant margin over the past 20 years. With an annualized return of 28.78%, Netflix’s stock has produced an average annual return that is 20.91% higher than the market. This remarkable performance has resulted in Netflix becoming one of the most valuable companies in the world, with a current market capitalization of $239.96 billion.
The impact of Netflix’s outperformance can be seen in the substantial growth of an investment in the company’s stock. For example, an investor who had purchased $100 worth of Netflix stock 20 years ago would now have a portfolio worth $15,316.97, based on the current share price of $556.89. This remarkable return highlights the power of compounding returns, which can significantly increase the value of an investment over time.
The key takeaway from Netflix’s performance is the importance of compounding returns in building long-term wealth. By investing in companies that consistently outperform the market, investors can potentially generate substantial returns over time. However, it is crucial to remember that past performance is not necessarily indicative of future results, and investors should carefully consider their investment goals and risk tolerance before making any investment decisions.
