How can you pay for content when prices are rising and you have no revenue growth? It's impossible without losing money. Stock keeps on making new highs as long as the competition remains weak.
Sentiment: Strong Buy
AMZN, Hulu, AAPL, and few Chinese companies are streaming. IMHO, NFLX holds not much value.
Here is good analysis: http://seekingalpha.com/article/2442495-netflix-failure-to-stream-cash-flow
Sentiment: Strong Sell
The real competition is pay tv and cable. To that extent, an ecosystem of streaming is desirable as it propels cord cutting. As the cord cutting number increases, the ability to raise ARPU will increase. Netflix doesn't need anywhere near it's current dominant marketshare of streaming to be ridiculously valuable.
Trendy is unwilling/unable to recognize that NFLX has little of what is most valuable... Proprietary quality content. Even its "critically acclaimed" content has surprisingly little viewership, a fact it does its best to obscure. Its ability to raise ARPU will be constrained by AMZN and other streaming channels. Regardless, it already took its price increase for the foreseeable future...
I don't think it is only competition. You have cost (of providing their service) vs. advertising and transmission revenue. The stock price reflects enormous growth potential but only if cost is less than revenue. The last 200 points' rise, I believe, covers all such benefits. Any further rise is simply pigs pining on. Juts my view.
garolou, In this current market environment, I think that is a very sound post. If the growth continues in subs according to forecasts with no substantial moves in terms of competition, the psychology of the market says this keeps rising until who knows when.
The only problem I see is psychology can change fairly quickly and when a stock is arguably ahead of itself you can get sharp moves.
Of course for you long termers that should be expected with the sharp moves here and would just be noise until if and when something fundamentally changes or the perception that something has fundamentally changed.
Hi Hapihammer! I agree with you. When fundamentals and psychology changes, this could reverse quickly. On the technical side, which is where my focus is, there was a major negative divergence on Thursday between NFLX price and several oscillators that I use. I thought for sure Friday would have NFLX going down hard, but so far, my trade is not working. I'm still in the puts, because I'd rather be short at these levels than long. If we go down just $10 from here, my puts are profitable. Any thoughts from you or anyone on my approach are welcomed. On a side note, I don't want to bother looking it up, what is this "techstrategy" that so many people are posting about?