In a significant achievement, Netflix Inc. has reached a new milestone by surpassing its previous record set in 2021, as investors continue to show their support for the streaming-video giant's focus on improving profitability. The company's stock rose by 1.5% on Tuesday, reaching a level not seen in nearly three years, reinforcing its position as a leading player in the industry.

Investor confidence in Netflix's strategy has been evident, with the company reporting a remarkable increase of over 150% in upfront ad sales commitments for 2023, signaling its growing advertising power. This bodes well for Netflix as it diversifies its revenue streams and bolsters its financial performance.

Daniel Morgan, Senior Portfolio Manager at Synovus Trust, believes that investors are wholeheartedly embracing Netflix's shift in strategy. Previously known for its heavy spending on content, negative free cash flow, and reliance on debt, Netflix's commitment to changing this narrative has had a significant impact. The company's consistent efforts and focus on profitability have set it apart from its competitors and have started to pay off in terms of investor rewards.

This achievement represents a remarkable turnaround for Netflix's stock, which had seen a decline of more than 75% from its peak in 2021. Since then, Netflix has taken strategic measures such as cracking down on account sharing and introducing a subscriber tier supported by advertising, which have eased investor concerns about growth and cash flow. These steps have proven successful, with the stock quadrupling in value since its lowest point.

In addition to the financial improvements, Netflix has delivered several major hits in the last quarter, including the highly anticipated new season of "Bridgerton," the surprise hit "Baby Reindeer," and the French movie "Under Paris." The company has also ventured into sports and live events, further expanding its offerings.

The momentum continues as Netflix added a remarkable 8.05 million customers in the second quarter, solidifying its lead over rivals. As a result, Netflix's stock has climbed for six consecutive sessions and has risen by over 40% this year, further distancing itself from competitors like Walt Disney Co., Warner Bros Discovery Inc., and Paramount Global Inc., who have seen declines in their stock value.

While Netflix's rally has placed its 14-day relative strength index in overbought territory, concerns surrounding the company's multiple have been alleviated due to improvements in profitability. Trading at 32 times estimated earnings, which is less than half its 10-year average of 72, Netflix's valuation is seen as reasonable by analysts and investors.

As Netflix continues to strengthen its position in the streaming market, its success in shifting towards a more profit-focused strategy has been well-received by the investment community. With a solid track record of delivering hit content offerings and a commitment to improving financial performance, Netflix remains at the forefront of the streaming revolution.