Investing Theory

5 Promising Entertainment Stocks for 2024: Smart Investments Uncovered

October 12, 2023

If you’re scouting for standout investment options in the entertainment industry, identifying the top performers is crucial. Here, we spotlight “5 promising entertainment stocks for 2024” that savvy investors are eyeing for their potential to outpace the market.

Read on to learn which companies might offer dynamic growth in your 2024 investment strategy.

Entertainment Stocks: an Evergreen Choice

Entertainment stocks, characterized by their dynamic market share, represent companies within the entertainment industry, encompassing areas such as film, television, streaming services, and gaming, including mobile games sector, as well as cloud gaming.

These stocks have long been a favorite among investors for their consistent sales and earnings growth. They have proven their mettle time and again, weathering market fluctuations and adapting to evolving consumer preferences with agility. Tech advancements such as the use of artificial intelligence, cloud computing and e commerce have only added to their appeal, opening up new avenues for growth and expansion for entertainment and tech companies.

However, resilience is only part of the story. Entertainment stocks offer investors a chance to gain bran new exciting view, adding a layer of engagement that few other sectors in the stock market can offer. With their robust performance and potential to tap into industry trends, these stocks offer a compelling choice for diversifying portfolios and countering bearish sentiments on Wall Street, including the New York Stock Exchange.

Walt Disney Co. (NYSE: DIS)

In the realm of entertainment, few companies shine as brightly as the Walt Disney Co. With a legacy that spans decades, the company operates a diverse portfolio of businesses ranging from movies to theme parks. The recent expansion into streaming services, coupled with the post-pandemic resurgence of its theme parks, is poised to drive growth in 2024.

Walt Disney Co. (DIS): annual actual revenue and consensus recommendations; screen from the Scrab.com tool

Streaming Success

The runaway success of Disney’s streaming services has significantly bolstered the company’s revenue growth. Disney+ alone amassed over 157.8 million subscribers by the end of 2023, highlighting the platform’s popularity. This success can be attributed to Disney’s vast and diverse content library, which includes over 7,500 TV episodes and 500 films.

Moreover, Disney has been adept at forming strategic partnerships that have bolstered its streaming platform. Its collaboration with the Streaming Innovation Alliance, for instance, has helped it navigate the competitive streaming landscape and maintain strong shareholder returns. The company’s focus on quality content, coupled with its ability to cross-promote across platforms, has played a vital role in its streaming success.

Theme Park Revival

Millions around the globe find enchantment in Disney’s theme parks. Following the pandemic, these parks have witnessed a significant resurgence, with revenue on the rise. One of the most anticipated attractions planned for 2024 is Tiana’s Bayou Adventure, expected to boost park attendance and revenue.

Consumer spending in theme parks has surged post-pandemic. Coupled with strategic investments in its theme parks and cruise lines, Disney is well-positioned to capitalize on this trend and boost its net asset value. With the theme park segment contributing substantially to Disney’s diversified portfolio, the revival of these iconic destinations promises to be a key growth driver for the company in 2024, potentially generating increased free cash flow.

Electronic Arts Inc. (NASDAQ: EA)

Venturing into the gaming industry, Electronic Arts Inc. (EA) is a tech giant that’s worth noting. With a rich portfolio of popular franchises such as FIFA and Madden NFL, EA has carved a niche for itself in the gaming world. The company’s strategic expansion into mobile gaming and utilization of esports and live services are anticipated to fuel its growth in 2024.

Electronic Arts Inc.: annual actual revenues and debt to assets; screens from the Scrab.com tool.

Expanding into Mobile Gaming

The mobile gaming market has seen exponential growth in recent years. Recognizing the potential of this sector, EA has made significant strides in expanding its presence in mobile gaming. Its mobile games like Rocket Arena and Madden NFL 24 Mobile have been well-received by gamers and have contributed significantly to the company’s net asset growth.

The global mobile gaming market is expected to achieve a value of $118.90 billion by 2027, demonstrating a robust growth rate. EA’s expansion into this market, backed by its diverse game offerings and strategic investments, positions it well to tap into this growth and sustain its earnings growth, potentially increasing its market cap.

Esports and Live Services

Esports and live services offer EA another avenue for growth. Popular esports titles like FIFA and Madden NFL have garnered a dedicated fan base, providing the company with opportunities to engage with gamers and generate recurring revenue. In fact, EA’s live services alone account for nearly two-thirds of the company’s revenue, underscoring the potential of this segment.

These live services not only provide a steady stream of revenue for the company, but they also enhance the gaming experience for players. These services, which enable gamers to connect with friends and family for little to no cost, have cultivated a robust community of loyal gamers for EA.

Netflix Inc. (NASDAQ: NFLX)

Netflix Inc. needs no introduction. As a pioneering force in the streaming industry, the company has set the bar high with its innovative content and user-friendly platform. Despite its achievements, the company continues to actively seek international expansion and diversification as strategies to uphold its market lead amid escalating competition.

Netflix: EBIT and consensus recommendations; screen from the Scrab.com tool.

International Expansion

Netflix’s international expansion strategy has been a key factor behind its impressive growth. With an estimated 247 million international subscriptions, the company has made significant inroads into markets around the globe. Its strategy of creating localized content, tailored to the tastes of regional audiences, has been a winning formula, attracting a wide array of viewers.

The company is also actively exploring opportunities to expand into new markets. Some of the strategies Netflix is using to achieve this include:

  • The innovative ad tier plan, operational since November 2022, which is anticipated to be instrumental in this pursuit
  • Continuously diversifying its content to appeal to a wider audience
  • Exploring new markets to reach untapped customer segments

With these strategies in place, analysts expect Netflix to be well-positioned to continue its growth trajectory and maintain its market share, even in a slowing economy.

Diversification Efforts

Netflix is making significant investments in diversification to maintain a competitive edge. The company’s focus on producing local content for international audiences has helped it cater to diverse tastes and preferences, thereby enhancing its appeal. It has also been exploring new advertising formats, such as sponsorships and embedding QR codes in programming, to boost its revenue.

These diversification efforts, coupled with the company’s strong focus on creating original content, have enabled Netflix to maintain its market leadership. By expanding its revenue streams through initiatives like increasing subscription prices and developing an advertising business, the company is poised for continued success.

Take-Two Interactive Software Inc. (NASDAQ: TTWO)

Take-Two Interactive Software Inc. is another notable player in the gaming stocks. Known for its popular franchises like Grand Theft Auto and Red Dead Redemption, the company has built a solid foundation for growth. Its recent acquisition of Zynga has opened up new opportunities, further strengthening its market position and significantly affect company's profit.

Take-Two Interactive; debt to assets and consensus recommendations; screens from the Scrab.com tool.

Core Franchise Strength

Take-Two’s core franchises are a testament to its strength in the gaming industry. With titles like Grand Theft Auto and NBA 2K, the company has established a loyal fan base and generated significant revenue. These franchises have not only cemented Take-Two’s position in the gaming industry but have also set a high standard for other players in the market.

To ensure the continued success of these franchises, Take-Two has been actively engaging with its fan base. From hosting competitions to leveraging social media channels, the company has been able to create a strong bond with its gamers, thereby ensuring their loyalty.

Growth through Acquisition

In addition to its core franchises, Take-Two’s growth strategy also includes acquisitions. The acquisition of Zynga, a leader in mobile gaming, has allowed Take-Two to expand into new gaming categories and tap into the rapidly growing mobile gaming market. This has not only diversified the company’s offerings but has also boosted its revenue significantly.

Live Nation Entertainment Inc. (NYSE: LYV)

Moving away from gaming, we focus now on Live Nation Entertainment Inc. As a global leader in live entertainment, the company is expected to witness growth in 2024 as the industry recovers from the pandemic and technological innovations pave the way for new experiences.

Live Nation Entertainment: debt to assets and consensus recommendations; screens from the Scrab.com tool.

Post-Pandemic Recovery

Live Nation has been gearing up for a post-pandemic recovery with a focus on live music events. With several artists scheduling tours for 2024 and 2025, the company is set to capitalize on the rise in live experiences.

Yet, their strategy extends beyond just hosting events. Live Nation has also been adapting to changes in consumer spending patterns. While large events have seen a revival, smaller artists and venues are still facing challenges. This changing landscape has prompted the company to reassess its strategies and find innovative ways to engage audiences and drive revenue.

Technological Innovations

Amid rapid technological advancements, Live Nation swiftly adapts and innovates. The company has been exploring technologies like virtual reality to create immersive concert experiences for audiences. It has also been leveraging live-streaming services to generate additional revenue, catering to attendees who are unable to attend events in person.

These technological innovations, coupled with the company’s focus on enhancing customer experience, position Live Nation at the forefront of the entertainment industry. By staying attuned to technological trends and continuously innovating, the company is well-placed to capitalize on the growth opportunities that lie ahead.

Summary

The landscape of the entertainment industry is dynamic and ever-evolving. Most of key players came out of the economic downturns related to Covid stronger than ever before.

As we’ve seen, companies like Walt Disney Co., Electronic Arts Inc., Netflix Inc., Take-Two Interactive Software Inc., and Live Nation Entertainment Inc. are harnessing the power of innovation and strategic growth to stay ahead of the curve.

With their resilient business models and adaptability to changing trends, these entertainment stocks shine as promising investment opportunities in 2024. As we move forward, it will be interesting to watch how these companies navigate the unfolding narrative of the entertainment industry and gain well-deserved potential growth opportunities.

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