3 Top Entertainment Stocks to Watch in December

Roku, Disney, and Netflix are three entertainment stock sleepers that could outperform.

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Entertainment stocks are publicly traded companies whose primary source of revenue is the entertainment industry. The entertainment industry is made up of businesses that make and sell movies, TV shows, music, sports, video games, and other forms of entertainment. Because entertainment stocks are highly dependent on consumer spending, they are frequently volatile. The global pandemic, for example, has had a significant impact on the entertainment industry, resulting in widespread cancellations and postponements.

As a result, the value of many entertainment stocks has plummeted dramatically. However, the industry is expected to recover in the long run as people resume normalcy. Investors can profit from the entertainment industry’s continued growth by purchasing entertainment stocks. Given this outlook, let’s take a look at three hot entertainment stocks to watch in the stock market right now.

Roku

To begin, Roku Inc (NASDAQ:ROKU) is a consumer electronics company that primarily manufactures digital media players. The company creates Roku streaming devices, which are used to access Roku’s streaming content platform and the Roku Channel Store.

Roku released its financial results for the third quarter of 2022 earlier this month. The streaming company reported a loss of $0.78 per share and revenue of $761.4 million for the third quarter of 2022. This compares to analysts’ expectations of a loss of $1.27 per share on revenue of $901.7 million for the quarter. Furthermore, revenue increased by 12% compared to the same period in 2021.

In Q3, we delivered meaningful growth in scale and engagement“, the company stated in its letter to shareholders. We added 2.3 million incremental Active Accounts, and The Roku Channel’s Streaming Hours increased more than 90% year over year. Platform revenue grew 15% year over year, which was lower than our historical growth rates but positive given the difficult macro environment.

Meanwhile, Roku stock is down 80% year to date.

Disney

Walt Disney Co. (NYSE:DIS) is the most well-known and diverse entertainment company. Walt Disney has five main business areas: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive.

The company recently announced that Robert A. Iger has been re-appointed as CEO of Disney. For the uninitiated, Mr. Iger has been with the company for over 40 years, 15 of those as CEO.

I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO”, Mr. Iger said. “Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe—most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration.

Disney stock has fallen by over 42% since the beginning of 2022.

Netflix

Let us now turn our attention to Netflix (NASDAQ:NFLX). To begin, Netflix is a streaming service that provides thousands of internet-connected devices with a wide range of TV shows, movies, anime, documentaries, and other content. To put things into perspective, the company currently has 222 million paid memberships in over 190 countries. Moving on, Netflix recently reported better-than-expected financial results for the third quarter of 2022.

In particular, the streaming giant reported $7.9 billion in revenue for the third quarter of 2022 and an EPS of $3.10. This exceeded analysts’ expectations of $2.11 per share and $7.8 billion in revenue for the third quarter of 2022. Furthermore, Netflix stated that it anticipates Q4 2022 earnings of approximately $0.36 per share and revenue of approximately $7.8 billion.

Netflix stock is down more than 50% since the start of the year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Stephanie Chateauneuf owns shares of Netflix. The Motley Fool recommends Netflix, Roku, and Walt Disney. The Motley Fool has a disclosure policy.

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