The streaming leisure trade continues to evolve quickly, with each established giants and smaller specialised gamers competing for viewer consideration and subscription {dollars}. Netflix NFLX, the worldwide streaming chief with greater than 300 million subscribers worldwide, stands in stark distinction to Starz Leisure STRZ, a newly unbiased premium content material supplier concentrating on ladies and underrepresented audiences with roughly 19 million North American subscribers. Each firms lately accomplished important company milestones — Netflix executed a inventory cut up in November 2025, whereas Starz separated from Lionsgate in Could 2025 — making this an opportune second to judge their respective funding deserves.
Let’s delve deep and carefully evaluate the basics of the 2 shares to find out which one is a greater funding now.
The Case for NFLX Inventory
Netflix demonstrated renewed momentum in its third-quarter 2025 outcomes, with revenues rising roughly 17% yr over yr to round $11.5 billion, marking the quickest income development charge the corporate has achieved in a number of years. The streaming large’s promoting tier has reached an inflection level, with the ad-supported tier now reaching round 190 million month-to-month lively viewers globally, and roughly 40% of recent sign-ups in advert markets selecting the cheaper advert plans. Administration expects advert revenues to greater than double in 2025, offering a significant second development engine past subscription charges that carries larger incremental margins.
Netflix’s strategic push into stay programming represents one other compelling development alternative. The corporate has secured a 10-year deal for WWE Monday Night time Uncooked and two NFL Christmas Day video games coming in December 2025, alongside U.S. broadcast rights for the FIFA Girls’s World Cup in 2027 and 2031. These stay occasions drive large concurrent audiences, scale back subscriber churn, and supply premium promoting stock. Administration’s confidence is mirrored of their steerage for fourth-quarter 2025 revenues of roughly $11.96 billion, implying roughly 17% year-over-year development, with full-year income expectations of $45.1 billion and an working margin close to 29%.
The corporate accomplished a 10-for-1 inventory cut up on Nov. 17, 2025, making shares extra accessible to retail buyers and workers whereas signaling administration’s conviction in long-term worth creation. Netflix’s worldwide growth continues to bear fruit, with revenues in Asia-Pacific rising 21% yr over yr and Europe, Center East, and Africa seeing 18% development. The corporate maintains a strong content material pipeline, together with the ultimate season of its in style sequence and high-profile movies, positioning it nicely to maintain engagement and pricing energy. Administration has set an formidable inner goal of reaching a $1 trillion market cap by 2030 whereas increasing working margins, demonstrating confidence within the enterprise mannequin’s scalability and profitability trajectory.
The Zacks Consensus Estimate for 2025 earnings is pegged at $2.53 per share, down by 0.1% over the previous 30 days. This means a 27.78% improve from the earlier yr.
Picture Supply: Zacks Funding Analysis
The Case for STRZ Inventory
Starz’s monetary loss widened to $52.6 million within the third quarter, representing a 72% deterioration in comparison with the $30.6 million loss throughout the identical interval in 2024. Whereas the corporate added 110,000 streaming subscribers in the US to finish the quarter with 12.29 million prospects, this development was offset by linear subscriber declines, leading to flat sequential complete subscriber counts. Revenues elevated modestly to $321 million, up simply $1.2 million from the earlier quarter, highlighting the corporate’s battle to generate significant top-line momentum.
The corporate’s separation from Lionsgate, accomplished in Could 2025, has launched important operational and monetary challenges. Starz operates with a comparatively excessive leverage ratio of three.4 occasions, which administration goals to scale back to three.1 occasions by year-end and finally to 2.5 occasions, however this deleveraging course of would require sustained profitability enhancements that stay unsure.
Administration’s strategic pivot to content material possession goals to enhance economics and generate worldwide licensing revenues, however this transition requires substantial upfront funding throughout a interval when the corporate is already loss-making. The shift in Starz’s Canadian enterprise mannequin to a licensing settlement with Bell Canada, whereas doubtlessly offering secure revenues, reduces direct subscriber visibility and management. The corporate misplaced 240,000 linear subscribers and 950,000 complete prospects yr over yr, underscoring the secular headwinds going through premium cable networks. With content material funding projected to lower and the corporate concentrating on $200 million in adjusted OIBDA for 2025, Starz faces the tough problem of balancing value self-discipline with the necessity for compelling authentic programming in an intensely aggressive streaming panorama dominated by a lot bigger, better-capitalized rivals.
The Zacks Consensus Estimate for 2025 loss has widened to $4.05 per share from a lack of $1.37 per share in 30 days’ time.
Picture Supply: Zacks Funding Analysis
Valuation and Worth Efficiency Comparability
Netflix trades at a ahead price-to-earnings ratio of 33.35 occasions, reflecting a premium valuation that acknowledges the corporate’s market management, constant execution, and a number of development drivers. Whereas this a number of seems elevated in comparison with conventional media firms, it’s justified by Netflix’s 17% income development trajectory, increasing margins that reached 28% within the third quarter regardless of one-time expenses, and projected free money move of roughly $9 billion for 2025.
In distinction, Starz trades with a detrimental price-to-earnings ratio of 6.1 occasions, reflecting its present unprofitability. Whereas the depressed valuation may superficially seem engaging, it primarily displays substantial enterprise challenges, together with working losses, excessive leverage, subscriber attrition, and restricted scale in a capital-intensive trade.
NFLX vs. STRZ: P/E F12M Ratio
Picture Supply: Zacks Funding Analysis
Netflix’s shares have surged 20% yr to this point in contrast with STRZ’s 2.2% decline and the Zacks Client Discretionary sector’s 21.1% development.
NFLX Outperforms STRZ Yr-to-date
Picture Supply: Zacks Funding Analysis
Conclusion
Netflix holds decisively higher upside potential than Starz Leisure throughout just about each basic dimension. Netflix combines world scale, diversifying income streams via promoting and stay content material, accelerating development momentum, margin growth, and substantial free money move technology. The corporate’s strategic investments in sports activities rights and stay programming place it to seize promoting {dollars} whereas lowering churn, and its content material library depth supplies sustainable aggressive benefits. Conversely, Starz Leisure struggles with widening losses, subscriber stagnation, excessive debt ranges, and restricted sources to compete towards well-funded streaming giants. Whereas Starz’s discounted valuation may tempt contrarian buyers, the deteriorating monetary efficiency and difficult aggressive positioning recommend substantial draw back threat. Traders ought to monitor Netflix inventory for engaging entry factors following any near-term volatility, whereas staying away from Starz inventory. NFLX presently carries a Zacks Rank #3 (Maintain), whereas STRZ has a Zacks Rank #4 (Promote).
You may see the whole record of right now’s Zacks #1 Rank (Robust Purchase) shares right here.
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Netflix, Inc. (NFLX) : Free Inventory Evaluation Report
Starz Leisure Corp. (STRZ) : Free Inventory Evaluation Report
This text initially printed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
