3 Subscription Stocks Built to Withstand Market Volatility: Spotify, T-Mobile, and Netflix

Three subscription-based stocks, Spotify Technology (SPOT), T-Mobile US Inc. (TMUS), and Netflix Inc. (NFLX), are set to outperform in a volatile market due to their stable and predictable financials. Spotify shares have traded up 93% of their 52-week highs, while T-Mobile's earnings beat expectations, showing its true potential. Institutional buyers, such as State Street Corp, have boosted their stakes in Spotify, providing a vote of confidence for its future.

In an era of economic uncertainty, investors are seeking stable and predictable financials to navigate market volatility. Subscription-based stocks, with their recurring revenue models, have emerged as resilient options. Three notable stocks—Spotify Technology (SPOT), T-Mobile US Inc. (TMUS), and Netflix Inc. (NFLX)—are poised to outperform due to their robust financials and growth potential.

Spotify Technology (SPOT)

Spotify has shown remarkable resilience, with its shares trading at 93% of their 52-week highs. The company's one-year performance has been exceptional, with a 117% increase, significantly outshining many competitors and the broader S&P 500 index. Institutional interest in Spotify has surged, with State Street Corp boosting its stake by 1.7% to a $3.5 billion position [1]. This reflects strong market confidence in Spotify's growth trajectory.

T-Mobile US Inc. (TMUS)

T-Mobile has consistently demonstrated its market strength. The company reported an earnings per share (EPS) of $2.84, beating analysts' expectations of $2.69. This robust performance underscores T-Mobile's subscription service model, which benefits from its essential service offering, growing with the population. The company added a record 1.7 million subscribers in a single quarter, highlighting its growth potential. Analysts have revised their valuations upward, with Morgan Stanley's Benjamin Swinburne assigning an Overweight rating and a price target of $285, indicating a 12% upside potential [1].

Netflix Inc. (NFLX)

Netflix continues to be a prominent player in the streaming industry. The stock is trading at 92% of its 52-week high, and analysts suggest it is likely to reach new highs soon. Anticipating 23.4% EPS growth over the next year, Netflix presents a compelling opportunity for investors to capitalize on its momentum before broader market adoption inflates the stock price. The company's recent EPS report of $7.19 exceeded estimates of $7.07, indicating renewed analyst confidence [1].

Conclusion

In a volatile market, subscription-based stocks like Spotify, T-Mobile, and Netflix offer stability and growth potential. These companies' predictable revenue streams and strong market positions make them attractive options for investors seeking reliable returns. As market uncertainty persists, these stocks are likely to continue outperforming, providing a safe haven for investors.

References

[1] https://investorshangout.com/top-subscription-stocks-to-navigate-market-uncertainty-366230/