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Netflix, Inc. (NFLX) Message Board

  • TheBorg12345 TheBorg12345 Jun 14, 2010 8:53 AM Flag

    Morningstar Questions NFLX Future

    Morningstar just came out with a report today that questions the entire future of NFLX. They believe NFLX has no moat and their whole business model is not sustainiable.

    They say the fair value (not price target - but what it's worth now)is only $43.

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    • 5 more brokerages upgraded NFLX to $3500 from the current price. They say NFLX is making atleast 1B USD per day and it can only triple or quadraple from here in 2-3 months.

    • NFLX has taught me that the market is all about herd mentality and gamesmanship.

      This stock can not keep doing what they are doing indefinitely but that does not matter in the short run.

      I think it will be the next Enron or Worldcom at some point- my gut feeling is that beyond the buy the shares with company money so that the officers can make money on their options they are playing some games with the new subscriber data- but that is just a gut feeling.

      It does not matter right now. NFLX is a beachball between two waring groups and in the end retail investors will mostly lose. If you are long take the money and run.

      Longs congratulate yourself and do not get greedy. Take the money and run.

      AND NO one trading on this board will influence stock price and i have no position now .

    • I read the article. It says nothing about the $43/sh you mention.

    • Yup, here it is:

      http://quicktake.morningstar.com/Stocknet/san.aspx?id=340705

      Once the squeeze concludes (likely today), this insanely valued stock will plunge as its price adjusts to reflect its fundamentals.

      • 1 Reply to summergames
      • Here are the most important comments:

        ##############################################
        We don't think the company is well positioned for the long run, as digital distribution of content has lower barriers to entry and will probably lead to new competitive threats. In addition, Netflix has a history of returning cash to shareholders through stock buybacks, repurchasing $732 million worth of shares since 2006 while generating just $220 million in free cash flow. We expect future capital to be returned to shareholders via buybacks as opposed to a dividend, as the company is focused on driving earnings per share. We think free cash flow can fund these repurchases, but we wouldn't be too surprised if the company issued more debt to increase buyback activity.
        ##############################################

        1. the barrier to entry is getting smaller (more competition to come)
        2. Neflix is buying back shares at high prices instead of returning it to shareholders as dividends
        3. Insider just want to sell their stock options for the highest share price

    • Yeah, because, afterall, the analysts have been right about NFLX...all the way up to 120....

 
NFLX
451.18+1.62(+0.36%)Sep 30 4:15 PMEDT

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