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Netflix, Inc. Message Board

  • nw2000_ca nw2000_ca Apr 1, 2013 9:35 AM Flag

    NFLX BULL Reasons to Buy. NFLX BEARS Reasons to Sell

    BULL
    Netflix benefits from rising Internet and broadband penetration globally.
    Netflix will benefit from increased sophistication of mobile devices.
    Netflix benefits from “on-demand” programming.
    Netflix is able to utilize its data on viewing to customize and create content.
    Netflix has proven its ability to recover its brand equity.

    BEAR
    Netflix faces growing competition, and many of the competitors have greater resources than Netflix.
    Netflix has decided to create its own content, and production is expensive.
    Netflix expansion internationally is expensive and not profitable.
    Netflix most profitable segment is in decline.

    Conclusion
    Netflix is at the center of three very strong trends: improved speed and bandwidth for Internet and mobile Internet globally, increased demand across all screens for on-demand video content, and data mining for personalization and customized content. There are substantial positive catalysts underlying Netflix. The stock, on traditional growth metrics with a 2.0 PEG, is fairly valued today. However, should Netflix continue to overdeliver on earnings, the estimates upon which the PEG is based underestimate the PEG and tip the scales to an attractive valuation. In either case, Netflix is highly attractive on pullbacks. Lastly, for investors who like to identify a long-term growth trend and invest in the leader in the bullseye of that trend, Netflix is a game changer. Netflix should be a part of a long-term portfolio investing in disruptive technologies.

    Sentiment: Sell

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