NFLX is way overvalue. The stock is trading 8 times its revenues. Everyone who owns this stock are the dreamers, expecting NFLX will fly like former booming-internet stocks. Well,this bear market will eventually justify its value. If NFLX goes down from 16 to 13, it would scare the hell out of everyone owns NFLX. Then you would expect to see a lot of investors start selling NFLX. Faithful investors of Netflix shall feel the pain when NFLX steadly goes down from 16 to $13,$10, and $7.
Price / Sales is 7.76 right now and that's about what it should be at that price and at this growth.
99 Revenues were 5 M 00 Revenues were 36 M 01 Revenues were 76 M 02 Revenues I project at 135 M, which at current prices will cut Price / Sales to 4.00, which is very reasonable considering the following:
EBAY 19.14 AMZN 1.96 MSFT 10.63 AOL 1.83 BBI .96
..all of whom have gone through the majority of their growth.
With 2002 revenues, and maintaing a VERY conservative Price / Sales ratio of 5, I would price this at $20 / share after 2002 revenues are announced, and a price target of $30 after 2003 Q2 revenues are announced.
To adjust for a higher or lower price / sales ration, you can do the math.
I strongly dissagree with the over value comment. Netflix supposedly has 600k paying customers. Their closes competitor "rentmywhat? has 10k. Our sworn enemies BBI have something like 65million visitors and there are what 25 million households with dvd's? With Nflx on the verge of profitability with 600k customers, that's approx 144mil/yr and growing, I think the numbers will be there for a few years. But I do agree that a dip down toward $10/share is a nasty place to be.