The retail sales report for June showed a slight increase in consumer discretionary spending. One month doesn’t make a pattern, but it’s at least a temporary relief for companies that rely on consumers willing to stretch their budgets for their products and services.
One area that’s remained strong among consumer discretionary stocks is streaming services. Despite claims of streaming fatigue, many consumers find that they’ll get rid of many things in their budget before they give up their streaming services.
The companies that offer these services have noticed and found a way to be more profitable. They offer a discounted monthly service price and make up for it with ad revenue.
As we move into earnings season, investors will hear which of these companies stand out among the rest. One of the key metrics they’ll use to judge that performance will be the company’s subscriber numbers. Here are three companies to watch.
Analysts Don’t Care That NFLX Stock Is Expensive; Should You?
Netflix Inc. (NASDAQ: NFLX) invented the streaming category and in the last few years, the company’s strategic pivots to increase monetization without alienating its subscriber base is truly impressive.
That growth has continued in 2025. The company’s first-quarter earnings report delivered 12% year-over-year (YOY) revenue growth and 27% YOY earnings per share (EPS) growth, setting the bar high for the company’s earnings report, which was released on July 17. Analysts have been projecting 22% earnings growth for the full year.
Since the beginning of July, investors have been unplugging from NFLX stock. That's not surprising, the stock is priced to perfection and, at 59x earnings, it’s trading at about a 30% premium to its historic average.
Being priced for perfection may be why NFLX stock is pulling back from its all-time highs. But many investors thought the same thing when the stock was around $1,000. Throughout July, Netflix has received several bullish upgrades, suggesting analysts believe the company will continue to post strong results that can support a move to new highs.
Streaming Is a Key Piece to Disney’s Comeback Story
The Walt Disney Company (NYSE: DIS) is in the middle of an impressive comeback. That comeback was almost derailed in early August when tariff and inflation concerns dropped the stock to its 52-week low.
However, DIS stock has come roaring back and is up more than 43% in the last three months. A key reason for that is the company’s streaming operation, which turned a profit for the first time.
Disney isn’t a pure-play streaming stock by any means. Streaming via its Disney+, Hulu and ESPN+ platforms accounts for only about 25% of the company’s annual revenue. Nevertheless, it’s an integral part of the company’s business model because it provides predictable revenue that is more defensive than its theme park and cruise line operations.
Several analysts raised their price targets on DIS stock in July. At 24x earnings, the stock has attractive value, which includes a recently reinstated dividend. However, investors may have to wait for the company’s earnings on August 5 for a catalyst that could send the stock to multi-year highs.
ROKU Provides the Lock and the Key, But Is There Enough Growth?
Roku Inc. (NASDAQ: ROKU) is intriguing because it offers consumers both the lock and the key to streaming. In this case, the lock is its smart TVs and Roku sticks, which are the gateway to streaming services. The company offers the top-selling TV operating system (OS) in the United States, Canada, and Mexico.
The key is how the company monetizes viewership. This is done in several ways. The most obvious is through ad revenue. Roku sells ad space during programming on The Roku Channel and keeps 100% of the ad revenue for content it owns or licenses. However, the company also gets a percentage of ad revenue for third-party content. It also receives a commission on every subscriber it brings to other streaming services.
This combination positions Roku to continue winning the connected television (CTV) space. However, ROKU stock is up 55% in the last three months and is within 2.4% of its consensus price target of $92.67.
Several analysts have offered higher price targets, but Roku is not yet profitable. Therefore, investors should be cautious when trading the stock before its earnings report on July 30. The MACD isn’t showing a strong signal either way, but since the recent trend was bullish, it suggests the stock may be losing its upward momentum.
