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Netflix, Inc. Message Board

  • aceinmysleeve aceinmysleeve Jun 21, 2004 4:01 PM Flag

    Inflection point

    I am going to take a stab at what I think is the inflection point for Q2 results. These are the results that would leave Netflix at the exact same price after earnings as compared to the price of the stock on June 30. Comprende? I welcome competing predictions.

    In other words, these are the results that the market is "expecting".

    Sub Count: 2.1M
    Gross Adds: 541.5K
    Churn: 4.99%
    Revenue: 118.9M$
    Gross Margin: 41.06%
    SAC: 35$
    GAAP Profit: 3.43M$

    I predict anything worse is received harshly. It could be difficult to measure "worse" though, since an increased number of subs can lead to a lower profit but that's not necessarily "worse".

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    • There I think you are wrong. I don't think that a subscriber base of 10mm BY MAIL is realistic. By that time, given the churn number, they'd be through half of the qualified households in the United States, and the inroads of other delivery methods will be huge. To put the top here at 5million, on a FINITE technology with GROWING competition WITHIN its niche, and being BEHIND on other methods is why this valuation will drop.

      This is not a promise of a new technology. The proposition for NFLX was, and is, to make a boatload of money in a hurry before their market degrades. I believe they have ten years, which is a hell of alot longer than most give it. Every quarter that they don't produce EARNINGS is another quarter closer to the end game. Not many companies have triple or quadruple digit P/E ratios that many believe won't even exist in fifteen years. In my judgement, Netflix is a company that better make hay while the sun shines.

    • LMAO, you still here? Knock, knock anyone home? You want my prediction? No one gives a flying f*ck about those predictions, and this stock is bound for 20ish and below, unless they come out with blowout earnings. Maybe that's why there is 60% short interest, smart guy? Especially since the market is about to continue it's year long downtrend. Why dont you try TIVO another dying tech stock, right up your alley. Maybe Hastings know's a little better then you and your stupid pointless research? http://finance.yahoo.com/q/it?s=NFLX
      Chapel has brainwashed you into thinking that crap actually works in the real market.

    • You know my churn prediction is lower, aroudn 4.7%, but I haven't gotten the other numbers together yet. They're not too far off yours, I think the profit margin will be in low single digits around 3-5%, you have yours at 2% I believe (math in my head I could be wrong) so we're not all that far off on there.

      I'll post 'em up this week...enjoying my long weekend, take it easy!

      • 1 Reply to chapel_of_words
      • "I think the profit margin will be in low single digits around 3-5%, you have yours at 2% I believe "

        The big X factor I think is how much management is turning up content expenditure (recall that as being a go-forward goal of theirs). I have really no basis for putting a solid figure on this, but I am using 10% for just about everything else so I took 10%. This translates to an additional 5% to the total gross cost since content expenditure is only half of gross cost. This chews up about 3% of profit margin (mine is 2.89% btw).

 
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