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Anyone have thoughts on Netflix ?
Old 04-19-2016, 11:20 AM   #1
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Anyone have thoughts on Netflix ?

Taking a real beating today (4-19-2016). They reported yesterday, with current quarter numbers good, but some caution forward looking. Down over 11% at the time of this post. Their P/E is super high, but you see that in a newer market growth stock. 82ish looks like the low end support level. If it flirts with that, it could go much lower, if it deflects higher off that, just a move back to 100 gets you an over 10% bump.

The company is very intriguing to me. I look at my adult children and their friends and they ALL are buying their TV viewing internet based. If cable is dead, Netflix and their market peers are the future.

Thoughts ??
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Old 04-19-2016, 11:31 AM   #2
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I don't follow Netflix as an investment, but I do have some thoughts on the market.

Instead of burying the lede, I'm going to start by saying my guess is that Netflix's best days are behind it. And that's not because it has a bad product (I'm a happy Netflix subscriber) or because I think streaming video is a fad (because I actually think it's the future of TV). I'd be pessimistic on Netflix because their first mover advantage is now mostly gone and everyone is trying to crowd into their space.

I just don't see anyway for Netflix to maintain dominance in the online streaming market. Already the market is becoming pretty fractured with every content provider under the sun looking to create their own online subscription model.

And then there's Amazon. They just announced monthly pricing for Prime Video that undercuts Netflix by a $1 per month. But that's not the big problem. The big problem is that Amazon doesn't care about making a profit. Seriously. Bezos runs Amazon almost like he's allergic to profits. If Amazon seriously decides to take a run at online streaming, nobody is is going to be able to make any money in the space, including Netflix.
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Old 04-19-2016, 02:59 PM   #3
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Netflix is always going to be very volatile and risky. I am an indexer and do not even consider individual stocks, so I would say sell.
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Old 04-19-2016, 05:03 PM   #4
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Netflix has recently clamped down on VPN use by its customers, many of whom were outside the US and has access to a limited range of content. While this was done to appease regulators, it has pissed off a great many customers, who are cancelling Netflix service and are now shopping for competitive alternatives. It's only a matter of time before their revenues plateau.
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Old 04-19-2016, 05:12 PM   #5
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Miscellaneous thoughts pros & cons...
One of the issues for Canadians like me is content availability by country. I'm told content available in Canada is very limited compared to the US. Canadian subscribers used to circumvent this by using subscribed VPN gateways but Netflix is starting to block these VPN IP addresses. Not sure how much of issue this is for other countries or if Neflix will lose subscribers as a result. However, I'm also reading Netflix is trying to ensure the same content is available in all locations/countries.

Another area of competition is solutions such as XBMC/Kodi that streams "free" (greyscale, somewhat pirated) content. I don't profess to know a lot about this solution but it's currently only going to appeal to the techies.

Netflix has some very good Netflix produced content. One of the things I read is that the analytics they do on viewership patterns help give them an edge on what shows to produce that will appeal to their subscriber base vs say network television which is a bit of a crapshoot in terms of the pilot episodes they produce. If they have enough exclusive content but keep their pricing realistic, I think they'll retain subscribers. [Heck, I pay $5/month for a channel pack just so I can watch my AMC shows.]

Lastly, I was reading an article on how it still has a lot of room to grow in terms of geography (more countries and subscribers) and pricing. The gist of one point of the article was that while Netflix has to be cognizant of its pricing in the marketplace, the revenue growth would be significant by raising pricing even by a few dollars across the board.

Disclosure: I don't own Netflix but am a subscriber. Have considered buying it.
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Old 04-19-2016, 05:28 PM   #6
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I am not a shareholder, or a Netflix user, but for what it's worth, I'll add this.
I'm not sure if this is still possible, but I know a lot of people that had Netflix in the past, would share their password with others, and they could all use it any time.
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Old 04-19-2016, 06:41 PM   #7
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Sharing accounts is pretty doable. I'm actually considering "lending" account to my buddy too.
However, Netflix does have different accounts which have limitations on the number of streams you can access at once. We have the standard account which allows for 2 streams. While rare, it's not unheard of for the missus to be watching Neflix on tv while I watch Netflix on the laptop while multitasking, hence why I'm not sure if I want to share my account with my buddy.
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Old 04-19-2016, 07:19 PM   #8
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We ran into the VPN wall recently. We spend about 10 months per year outside of the U.S. so that's been a pretty critical way for us to use the service. Previously if you were outside the U.S. there was a good chance that Netflix simply didn't work wherever you were.

But the VPN crackdown came at the same time Netflix went truly global. It's now available in something like 188 countries. Now, my U.S. subscription will work just about anywhere.

The problem is that you're limited to whatever content is available in the country you're in. I know that each country has different shows. And some of the international stuff is quite good. But it will be interesting to see how useful Netflix is for us when we leave the U.S. again this May. If there isn't good programming available around the world, Netflix may no longer be the best choice for us.
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Old 04-19-2016, 07:53 PM   #9
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NFLX is a volatile stock. I've made money from it. However, you cannot panick if it goes down $10 in one day. The $82 you saw was during the broad market sell off when Crude oil was $26 and everything in Wall st was down and everyone panicked - I don't know if it will get back down there after this sell-off. I was able to buy at $82, even though it went to $79+ for a moment. On average, it goes up and down $13 on one day during earnings according to one article. It can go up $5 - $8 like nothing. It's not for the faint of heart.

P/E does not work here. It's a 'Cult stock' like Amazon. It's the the premier streaming video provider globally. While Amazon might take some of it's customers locally, Netflix is still way ahead in the global video streaming market. So, analyst are still saying their target is $120 - $150.
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Old 04-19-2016, 08:00 PM   #10
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Originally Posted by cyber888 View Post
So, analyst are still saying their target is $120 - $150.
How are they arriving at those price targets? Value / customer or some such?
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Old 04-19-2016, 08:07 PM   #11
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Quote:
Originally Posted by YVRRocketSurgery View Post
Sharing accounts is pretty doable. I'm actually considering "lending" account to my buddy too.
However, Netflix does have different accounts which have limitations on the number of streams you can access at once. We have the standard account which allows for 2 streams. While rare, it's not unheard of for the missus to be watching Neflix on tv while I watch Netflix on the laptop while multitasking, hence why I'm not sure if I want to share my account with my buddy.
Frank lives next door to me, and has a Netflix account. He has installed it on my TV too, so that when he comes over we can watch Netflix together. It is no problem for us if we are both watching different shows at the same time on it in our separate houses.

However, I don't watch it when he is not here, because it just does nothing for me. I have Amazon Prime, too, and haven't watched anything on that either.

I just finished watching The Voice over the air with a homemade antenna, and enjoyed it immensely. The shows I like are OTA, and the shows on Netflix and Prime don't appeal to me.

As for Netflix, as I look into my crystal ball....



I see.... that Netflix will start charging a LOT more sometime in the next few years, since the country is becoming "hooked" on it and all they have to do now is demolish their competition with their present low prices. Or else, maybe Amazon will demolish Netflix and do the same.
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Old 04-19-2016, 08:17 PM   #12
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How are they arriving at those price targets? Value / customer or some such?
This is the article from different analyst covering Netflix and their price range.

Netflix, Inc. (NASDAQ:NFLX) - Netflix Crashed 10%: Here's Everything Wall Street Is Saying | Benzinga
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Old 04-19-2016, 08:25 PM   #13
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Originally Posted by cyber888 View Post
This is the article from different analyst covering Netflix and their price range.

Netflix, Inc. (NASDAQ:NFLX) - Netflix Crashed 10%: Here's Everything Wall Street Is Saying | Benzinga
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Old 04-20-2016, 12:19 AM   #14
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http://www.smh.com.au/business/media...18-go9hdb.html

That article explains a bit about Netflix international product.
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Old 04-20-2016, 08:54 AM   #15
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from today's trading, seems like the selling is over .. Netflix bulls buying back?

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