MBA FPX 5008 Assessment 2 Using Analytical Techniques to Add Meaning to Data

Business Context and Introduction

• Company Overview

Netflix was started by Reed Hastings and Marc Randolph in 1997. It began as a DVD rental company, and in 2007, it changed to streaming videos (Wilson, 2026). Today, they operate as a pure video/audio streaming site, and their offerings in the form of entertainment to consumers include television shows, movies, documentaries, and live programming to consumers in more than 190 countries of the world (Wilson, 2026). As of 2023, there are estimated to be 260 million Netflix subscribers, who pay to use it (Wilson, 2026). With offices located in Los Gatos, California, Netflix has about 12,800 employees and possesses the biggest market share (44.21%) within the global subscription video-on-demand industry (Wilson, 2026). Warner Bros).

• Current Relevance

In January 2026, Netflix took a risky new step when it acquired InterPositive, an artificial intelligence-powered production tool by Academy Award winner Ben Affleck. (Murray, 2026). This was recommended to be the next logical move for the company, which had hit record Q4 2025 revenues of 12.05 billion in the quarter, a rise of 6.7 percent over the previous year, and 33.72 billion in annual revenues (Wilson, 2026). As part of its longstanding policy of investing heavily in its proprietary technology, original content, and advertisement-based tiers, Netflix has been consistently constructing a new competitive edge to propel its long-term growth up to 2026 (Reuters, 2026).

• Competitor Comparison Table

We include in the following table (references listed below) the value of several key metrics of the three largest direct competitors of Netflix, Warner Bros. Discovery, and Paramount, based on their fiscal year 2023 (Wilson, 2026; Warner Bros. Discovery, 2024; SEC, 2024). This amount of revenue, market share, and profitability growth Netflix has compared to the other two key players is enough to guarantee that it is the largest pure-play streaming platform in the world (Wilson, 2026). Both Warner Bros. Discovery and Paramount Global are long-established, creditworthy businesses within the industry, yet they both continue to fail in the sea of profit as they both strive to overhaul their legacy media business and more closely resemble a streaming-first presence. HBO Max is only sharing a market presence of 10.31 and Paramount+ shares slightly less than 7% (Wilson, 2026).

Data Collection and Data Analysis

The recent trend: The data for these three companies (Netflix, Inc. (NFLX), PSKY, and WBD) are the historical daily stock prices and trading volumes of Netflix, Inc., PSKY, and WBD during the period January 2, 2015 to Jan. 31, 2025. This gave a composite of 2,536 trading observations of all three firms. The OTC shares are quoted on a split-adjusted price. Created in Python and matplotlib, the charts that will be presented follow formats designed to present to business analysts, such as professional axes, legends, titles, and so on. Each chart comes with a paragraph of interpretation, which addresses the big analysis questions of the assessment criteria.

Graphic 1: Netflix (NFLX) stock high daily price and 60- day moving average (20152025)

In Graphic 1, the high intraday closing price was chosen for Netflix stock, which was acquired in 2536 trading days between January 2015 and January 2025. The figure shows a 60-day moving average and a linear trend line. Netflix has been adding a substantial number of subscribers, and the high cost of generating original content explains why the stock price has steadily risen since it was initially around 5.03 at the beginning of January 2015, and as of December 2021, the highest the stock price is at 99.90. In 2018, stock prices went into a downward correction but have since recovered well. Moreover, they have reduced stock prices significantly as of early 2022 following its issuing the first stock-subscriber loss in almost 10 years when they fell below 25 per share. The stock price has always been swinging high and low, but the straight tendency has always shown an upward trend of about 5.43 of the stock price a year since the company was established, meaning that it has made huge price gains since the establishment of the company.

Graphic 2: Netflix (NFLX) Lowest Daily Stock Price with 60-Day Moving Average (2015–2025)

Graphic 2 demonstrates how the lowest price of Netflix in terms of intraday has grown over the past couple of years, between January 2015 and January 2025, and also takes a look at the 60-day moving average and the linear trend line of the price of Netflix, in the same time frame. The intraday lowest price of Netflix stood at approximately 4.53 in January 2015, and since then, its lowest price has been largely increasing, illustrated in Graphic 1. The significant decrease in price in April 2022 occurred when the intraday low went down to around $16.06, which is the lowest price for Netflix in almost 7 years. This can be attributed to the excessive fall in the value of Netflix since that time, both in terms of loss in subscribers and in increasing interest rates. The 60-day moving average shows that there is still price pressure towards the downside of Netflix prices until approximately mid-2022, and that the linear trend line shows that Netflix floor prices have risen over the whole decade.

Graphic 3: Stock Price Comparison — Netflix (NFLX) vs. PSKY vs. WBD (2015–2025)

Graphic 3 also shows that in the 2536 days of trading between 2015 = 2025, Netflix experienced the lowest initial price (4.87) and the largest price advancement (almost 98), at the market correction of 2022. In comparison, both competitive companies (PSKY & WBD) had significant drops in their stock prices over the same time period. From 2020 until 2021, there was a significant difference between Netflix and its competitors because of Netflix’s significant growth, caused by increased streaming due to the pandemic. The three stocks (Netflix, WBD, and PSKY) indicated that Netflix was far ahead in investor confidence, growth rates of subscribers, and the size of the global platform it had.

Graph 4: Netflix (NFLX) Closing Price Distribution (2015–2025)

Fourth, the closing price of Netflix, over 10 years, has traded within the range of 10-50 more than half the time; hence, Netflix would tend to have prices above 70 as a strong sign of overvaluation and less than 10 as a strong indication of undervaluation. Fifth, Netflix’s mean daily trading volume was 8.07 million shares, indicative of a substantial enough volume to be successfully traded for significant amounts of time.

Analysts are quite unanimous about the results of this analysis; the earnings of the investors holding Netflix can be summed up as Buy, and the average price is expected to be 118.66 (24 percent above its present price), according to the consensus price prediction in 12 months (Stock Analysis, 2026). During fiscal year 2025, Netflix recorded revenues amounting to $45.18 billion, which is a 15.85% increase on an annualized basis, and earnings amounting to 10.98 billion. The overall gains and income figures of Netflix justify the long-term increase in Netflix stock prices that have already been determined ( Stock Analysis, 2026). The total market share of 44.21 and better liquidity, steady increase in stock price over the long-term, and positive consensus expressed by analysts all have a higher weight on the short-term risk of continuous volatility demonstrated in this analysis. Nonetheless, this analysis has its drawbacks; namely, the fact that none of the stock price data presented in this analysis gives any predictive value in terms of the future, and the omission of macroeconomic forces, including interest rate cycles and ad market forces, will lead to future factors in investment decisions. In the future, further studies are needed that incorporate discounted cash flow analysis and subscriber growth rates along with comparing the ad-based levels of Netflix with other services (e.g., Hulu) to come up with a fully developed investment analysis of Netflix are the extreme trading environment.

Graphic 5: Netflix (NFLX) Trading Volume Distribution (2015–2025)

Graphic 5 shows that daily trading volume has distributions of frequencies, and Netflix has volumes in 11 bins (0-50 million shares). The skewness is evidently to the right with a major proportion of the trading occurring at the low-volume levels (less than five million shares). The 4M to 6M shares (588 days) and 2M to 4M shares (582 days) bin ranges constitute almost 46 days out of the total combined days of 588 days and 582 days, respectively. The number of days that exceed some range of volume gradually decreases as the volume increases to the point where there are only 28 days that will exceed 30 million shares. The largest volume of Netflix was around 133.39 million shares; this is an extreme outlier because of crisis-level trading. The fact that Netflix has 1,170 days of trading in the 2M -6M volume level range evidences the stable level of liquidity shown by Netflix, which is typical of a larger-cap, institutional-grade growth stock.

Section 3: Descriptive Statistics and Interpretation

Chen (2024) specifies that the average of all closing prices on a daily basis is calculated by dividing the sums of the closing prices of each day by the total number of daily closing prices; then it is represented as one representative price level of the time of interest. The mean or median is the average value in a ranked data set; thus, it will generally give a fair representation of the places Netflix was valued at on any single day in the last decade due to its immunity against extreme values (Tenny and Hoffman, 2022). Mode shows the most commonly repeating (recurring) daily closing price. As a result, the mode represents the price at which Netflix has been closing several times and has had intervals of stability (PubAdmin Institute, 2025). The standard deviation is used to measure average price fluctuations of individual daily prices (Hargrave, 2025). The variance (University of Southampton, 2024) gives the calculation of how many average squares have been missed by each of the observations of daily price closings of the arithmetic mean.

The mean New York Stock Exchange stock price of Netflix at 34.04 USD day-to-day means that during the longest period in its history it was valued at a comparatively modest level not even half as high as it is currently at 98.48 USD; as such, the time period during which the elevated price regime was in existence among the deltas was extremely limited in statistical terms.Descriptive statistics can help in transforming raw financial information into strategic business action (Mchi et al., 2025). It is already evident that Netflix has an extraordinary growth trend since it was a start-up domestic streaming distribution company to the largest subscription video-on-demand service worldwide, during the last ten-year period based on a minimum daily closing price of 4.5547 and a maximum daily closing price of 98.49 that constitutes a price range of 93.93.

Naively with a standard deviation of $19.57 versus a mean of 34.05, Netflix shares have their coefficient of variation (CV) of 57; thus, Netflix shares satisfy the qualification of a high-volatility (high-log-row-variation) equity investment; thus, this value validates the fact that Netflix stock showed a volatility on prices around the standard deviation of mean 1520 in the last ten years that was largely due to quarterly reports of subscriber activity, a cycle of investment in Netflix content distribution, and the scale-dependent interest rate. Large standard deviation is usually indicative of large sensitivity to performance milestones in companies that trade on equity markets (Conrad et al., 2025). The variance of $383.06 also reinforces the notion that Netflix’s daily closing stock prices were very widely dispersed around the average daily closing stock price, which represents a significant amount of risk that a prospective acquirer should incorporate in developing their strategic financial modeling related to Netflix’s valuation level over the long term.

The fact that the average daily trading values were 8,066,671 shares/day implies that Netflix is one of the most traded shares on NASDAQ, and there were many institutions that were willing to continue providing liquidity to Netflix throughout the 10-year period. But the median (5,974,752) is significantly less than the average, indicating that the distribution is skewed to the right and generated by a very few days of high-volume crisis. Research has shown that the significant difference between average and median daily volumes in equity markets is a very general precursor to event-related market activity (Leippold et al., 2024). This disparity also indicates that the daily turnover of all but the crisis days was lower than the average calculated, and the overall daily turnover in the shares of Netflix was consistently within the 4-8 million share-days range of performances.

The standard deviation of 7,177,719 is almost equal to the average itself in size, and yields a coefficient of variation of about 88, which also indicates that the daily activities around share trading at Netflix were highly volatile, and occasionally affected by single episodes of news. The highest daily trading volume (133,387,515) was 16.5 times higher than the average share trading volume per day (8,072,400) and certainly occurred in the period between the April 2022 earnings announcement, when Netflix lost its first subscribers. Extreme share pricing outside of regular share price trading ranges is typically related to some fundamental change in valuation due to earnings surprises or significant business news (Song, 2024). Another indicator that continues to support the high volatility of the news of negative operational news is the difference between the maximum and minimum number of shares, in which the share volume stands at 132,519,628 shares. Any organization considering creating a strategic alliance with Netflix will have to take into account the sensitivity to extreme share price movement in creating a valuation risk model.

Section 4: Conclusions and Recommendations

The Amazon recommendation of an investment in Netflix is supported by five recommendations derived from a 10-year study of Netflix stock data (2015-2025) with an overall five conclusions. To begin with, the net present value growth of Netflix per year was 5.43, and the increase was 4.55, with a maximum of 98.49 in the ten years, totaling over 2000 percent accumulation in the entire ten years. Second, the aforementioned price increase of Netflix had significant volatility as well (the extent to which the price of a stock changes over time), with a standard deviation of $19.57 and a coefficient of variation of 57, the latter being the most volatile period of 75% of the market value of Netflix between July 2022 and September 2022. Third, when compared to the competitive set of Netflix (PSKY, Warner Bros Discovery), it is revealed that Netflix performed significantly better than PSKY or even Warner Bros. Discovery over the entire period. The tight competitor group generated price drops for both PSKY and Warner Bros Discovery, and the price of Netflix was constantly growing. Fourth, the closing price of Netflix, over 10 years, has traded within the range of 10-50 more than half the time; hence, Netflix would tend to have prices above 70 as a strong sign of overvaluation and less than 10 as a strong indication of undervaluation. Fifth, Netflix’s mean daily trading volume was 8.07 million shares, indicative of a substantial enough volume to be successfully traded for significant amounts of time.

Analysts are quite unanimous about the results of this analysis; the earnings of the investors holding Netflix can be summed up as Buy, and the average price is expected to be 118.66 (24 percent above its present price), according to the consensus price prediction in 12 months (Stock Analysis, 2026). During fiscal year 2025, Netflix recorded revenues amounting to $45.18 billion, which is a 15.85% increase on an annualized basis, and earnings amounting to 10.98 billion. The overall gains and income figures of Netflix justify the long-term increase in Netflix stock prices that have already been determined ( Stock Analysis, 2026). Netflix’s step of buying InterPositive, an artificial intelligence (AI) movie company owned by Ben Affleck, in the first quarter of 2026, is another sign of Netflix’s dedication to using technology to innovate content and implement strategies.

Summing it all up, it can be concluded that we should invest in or establish some sort of strategic alliance with Netflix. The total market share of 44.21 and better liquidity, steady increase in stock price over the long-term, and positive consensus expressed by analysts all have a higher weight on the short-term risk of continuous volatility demonstrated in this analysis. Nonetheless, this analysis has its drawbacks; namely, the fact that none of the stock price data presented in this analysis gives any predictive value in terms of the future, and the omission of macroeconomic forces, including interest rate cycles and ad market forces, will lead to future factors in investment decisions. In the future, further studies are needed that incorporate discounted cash flow analysis and subscriber growth rates along with comparing the ad-based levels of Netflix with other services (e.g., Hulu) to come up with a fully developed investment analysis of Netflix.