5 hot entertainment stocks to keep an eye on - Kalkine Media

July 21, 2021 12:45 PM PDT | By Team Kalkine Media
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  • Netflix, Inc.’s (NFLX) P/E ratio is 52.95. Its net income grew 88% YoY in the second quarter.
  • Walt Disney’s (DIS) net income for the April quarter of 2021 rose 96% YoY. The stock gained nearly 50% in one year.
  • Roku, Inc. (ROKU) announced to partner with NBCUniversal to provide access to Olympic coverage. Its stock price rose 172% in one year.

Entertainment is not a luxury but a necessity today. Hence, entertainment products and services are always in demand. For most entertainment companies, 2020 was profitable as their revenue from online and video streaming services surged as demand increased during the lockdown. 

People had limited options for outdoor activities due to the covid restrictions and hence occupied themselves with indoor activities like watching movies, sports, and other television programs.

Here we explore five entertainment stocks in the market.

Netflix, Inc. (NASDAQ: NFLX) is a video streaming service provider in over 190 countries with approximately 208 million paid streaming membership. Its subscribers can watch the videos on demand anywhere, anytime on any internet-connected screen.

The company was founded in 1997, and its IPO came in 2002. Netflix launched its streaming service in 2007. Its market capitalization is US$ 226.56 billion, and the P/E ratio is 52.95.

Its second quarter ended June 30, 2021, and revenue was US$ 7.34 billion, a 19% increase year-over-year. The net income for the same quarter was US$ 1.35 billion, reflecting an 88% growth year-over-year. Netflix earnings per share diluted were US$ 2.97 compared to US$ 1.59 for the June quarter of 2020.

The company’s primary source of revenue is streaming membership, contributing approximately more than 90%, and the rest comes from DVD by-mail service that is available only in the US.

Its operating margin was 25.2% for the June quarter of 2021 against 22.1% in Q1, a year ago.

The share has closed at US$ 531.05 on July 20, 2021, and it gained around 8% in one year. 

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Source: Pixabay

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Walt Disney Company (NYSE: DIS) is a leading diversified international entertainment and media company. Its revenue comes from Disney parks, Disney products, media and entertainment distribution, studios, general entertainment and sports, and theatrical and linear platforms. 

DIS has a market capitalization of US$321 billion, and forward P/E for one year is 75.86. For the quarter ended April 2, 2021, its revenue was US$15.6 billion compared to US$18.02 billion in the same quarter of 2020.

The net income attributable to the company was US$901 million compared to US$460 million for the same quarter the previous year, showing a YoY growth of 96%. Its earnings per share diluted was US$0.49. Walt Disney was founded in 1923 and went public in 1957. 

The stock gained nearly 50% in one year and closed at US$176.75 on July 20, 2021.

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DraftKings Inc. (NASDAQ: DKNG) provides digital gaming and sports entertainment through daily fantasy sports, online casinos, and sports betting. DraftKings was founded in 2012, and its IPO came in 2020. DraftKings has a market capitalization of US$19.38 billion.

Its revenue was US$312.28 for the quarter ended March 31, 2021, compared to US$88.54 million for the same period a year ago, reflecting an increase of 253% YoY. However, it incurred a net loss of US$346.3 million compared to US$68.68 million a year ago. Its enhanced expenditure on sales & marketing, product & technology, and general and administrative expenses contributed to the increased loss.

The company’s cash position improved to US$2.8 billion in the March quarter of 2021 from US$1.8 billion in the December quarter of 2020.

Its stock rose 22% in one year at the closing price of US$45.82 on July 20, 2021.

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Roku, Inc. (NASDAQ: ROKU) is a video streaming platform in the US. It generates revenue by selling digital ads, content subscriptions and video and audio streaming products & accessories.

ROKU Inc. was founded in 2002, and it went public in 2017. Its market capitalization is US$56 billion and a P/E ratio of 549.82. 

For the quarter ended March 2021, its revenue was US$574.18 million compared to US$320.77 million in the same period of 2020. The net income was US$76.3 million against a net loss of US$54.6 million in the previous year’s March quarter.

ROKU’s earnings per share diluted were US$0.54 compared to US$0.45 for the March quarter, 2020. Its cash and cash equivalents improved to US$2.08 million from US$1.09 million YoY in the March quarter. 

On Monday, it announced to partner with NBCUniversal to provide access to Olympic coverage and related entertainment to its users through its platform.

ROKU’s stock price rose 172% in one year at the closing price of US$417.2 on July 21, 2021.

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Source: Pixabay

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GameStop Corporation (NYSE: GME) is a specialty retailer that offers games, entertainment products, consumer electronics and services through e-commerce and physical stores.

GME’s market capitalization is US$13.97 billion.

Its net sales were US$1,276.8 million for the quarter ended May 1, 2021, compared to US$1,021 million in the same quarter the previous year. It booked a net loss of US$66.8 million compared to US$165.7 million for the same period a year ago. Its net loss per share diluted was US$1.01 against net loss per share diluted US$2.57 in May quarter of 2020. 

GME’s cash position improved to US$752.1 million compared to US$618.5 million in the January quarter of 2021. Its stock price notched 4668% in one year at the closing price of US$191.18 on July 20, 2021.

  Please note: The above constitutes a preliminary view, and any interest in stocks/cryptocurrencies should be evaluated further from an investment point of view.


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