The global economy is taking a substantial hit due to the widespread coronavirus outbreak, but there are some companies who actually stand to benefit from the social effects of the disease, and Netflix is one of them. The outbreak of the coronavirus has already caused home quarantines and business shutdowns on other parts of the world, and there's a chance that the same could be true of areas in the United States before too long. This will cause people to stay in their homes for extended periods of time. While that hurts the likes of movie theater and grocery store chains, it seriously helps out companies that make their money when users are at home.
The stock market saw a terrible dip this week, experiencing the worst Wall Street sell-off in nine years, but Netflix shares actually bumped up by 0.8%. If people are forced to stay in their house, it stands to reason that they'll be doing a lot of binging. Companies like Amazon, Facebook, Peloton, and Slack are all potential beneficiaries of the outbreak.
Netflix "is an obvious beneficiary if consumers stay home due to coronavirus (COVID-19 virus) concerns, and this has been reflected in considerable stock price outperformance this week," wrote BMO Capital Market analyst Dan Salmon (per Yahoo!).
Streaming services are obviously going to see a boost in traffic if folks are stuck at home, and Disney+ is currently one of the most popular streamers on the market. However, the House of Mouse won't be seeing the same kind of uptick as rivals like Netflix and Amazon. Yes, the streaming revenue from Disney+ and Hulu will certainly help Disney+ right now, but so much of the company's other money-making avenues will see declines, especially when it comes to the theme parks across the world. Disney has already shut down its Hong Kong park, and the sites here in the United States are set to see downward trends as well.
"If the contagion became more internationally widespread but short of panic, more people are likely to seek home entertainment options such as from companies like Comcast and AT&T, and streaming TV shows and films from Netflix, Disney+, Comcast's Peacock, AT&T's HBO Max and others," Moody's Investors Services analysts suggested.