On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. Within the next week, stock markets plunged. Since then, many companies have struggled to make ends meet. Movie theaters have closed down, with Cinemark laying off workers and AMC Theatres rumored to be looking into filing bankruptcy. Despite its hit streaming service, Disney+, Disney has been hit hard after being forced to close down all its parks. Big Cable, which was already hemorrhaging subscribers in the face of cord cutting, is looking at potentially facing even bigger losses in the face of canceled live sports according to recent surveys.

As people are forced to stay home and forego normal choices for entertainment, streaming has boomed. U.S. internet video viewing was up 109% year-over-year in March 2020, according to Nielsen data. The company that has benefited most? Netflix.

 

Netflix Has Skyrocketed During Quarantine

On the day WHO declared the pandemic, Netflix was worth $153.55 billion. The company sunk to a low $131.13 billion on March 16th, which was the day the stock market hit the bottom thus far. However, since then, as states began to issue Stay Home orders, streaming has boomed. And as streaming hours increased, Netflix’s value has skyrocketed to $192.52 billion as of April 16, 2020. That’s about a 25% increase since the day WHO declared the pandemic.

That means the value of Netflix has risen $39 billion since the pandemic declaration. And since the low so far on March 16th, Netflix’s value has skyrocketed $61.39 billion.

What does that mean for stockholders? On March 11th, Netflix stock was worth $349.92 per share. The stock hit a low on March 16th at $298.84. At the time of writing this article on the morning of April 16th, the stock was worth 438.05. That means since WHO declared the pandemic, Netflix stock has risen approximately $88 per share. And since the bottom of the market thus far on March 16th, the stock has soared by $139.

According to a recent report from Variety, Netflix, which has hit an all-time high stock price, is now worth more than Disney. The company is scheduled to report Q1 earnings on April 21 and is expected to beat forecast total net ads.

And it’s not just streaming hours that have increased. Pivotal Research Group now expects Netflix to net 8.45 million new subscribers for Q1. Simply put, as more people stay home, more people subscribe or maintain their subscriptions.

 

Roku Is Another Quarantine Winning Streamer

Netflix isn’t the only streaming company to benefit from quarantine. Roku, which not only makes streaming devices, but now primarily focuses on software and advertising. The company recently revised Q1 estimates, reporting a 7.9% quarter-over-quarter increase in revenue-generating users. Roku also stated that its users have streamed 13% more content. Q1 revenue is projected to come in around $312 million, which would beat projections.

At the same time, Roku’s users watched 13% more hours of streaming entertainment. First-quarter revenues should land near $312 million, above the top end of management’s guidance range for the quarter and far beyond the analyst consensus of $300 million. Roku stock sat at $90.63 on March 11, and is $129.72 at the time of writing. That’s a 43% increase since WHO declared the pandemic.

 

At this point, no one knows how long the pandemic will last nor how long we will all be staying home. And no one knows if the stock market has hit bottom or not. But its clear that many are betting on streaming companies like Netflix in this time when people are forced to spend more time at home.

William Parker

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