Netflix 📺

Hey all you cool cats and kittens!

Alister here with an update about Netflix, and their latest update. In case you haven’t heard. This little documentary called ‘Tiger King’ seems to be popular. Also, lots of people in lockdown all over the world have been binge watching more than usual.

What does that mean for the Stream King, Netflix, and their share price?

It means someone is going to be buying a few new jetski’s is what it means.

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(Probably not this guy though.)

We are seeing analyst increase their target share price for Netflix, and a few have seen Netflix hit their predictions. We have spoken in the past about Netflix’s dominance in the streaming space, and the debate about tech company versus entertainment, but one thing is clear. It’s working.

Through Disney+ entering the battle, Hulu (also owned by Disney) ramping up their offering, and a few other contenders across the world throwing their collective hats into the ring, Netflix has kept it’s cool.

We’ll also see the first quarter results the coming Tuesday, with lots of hyper behind the company will we see another jump up, or has the Exotic Pizza been consumed? Let’s checkout the rankings.

A few people are surprised to learn that Netflix isn’t considered a strong company when it comes to their cash. They aren’t special when it comes to the amount of profit they produce (relative to their size), they don’t have a lot of cash in the bank and have sizeable debts (funding movies and shows isn’t cheap!) Finally, they don’t give anything back to shareholders (similar setup to Amazon just without the insane profits.) All things consider, Netflix makes for a very low quality company, it’s in the bottom 20%!

If you thought the quality was ranked poorly, wait till you hear about the value! Netflix is very expensive (£142~ for a year of HD?) considering their share price versus how much money they actually make, which looking at the quality isn’t a lot. To really frame this, there are only 250~ companies we consider more expensive than Netflex. Netflix’s success is very much “priced in” yet we keep seeing incredible results and new achievements.

Speaking of the unexpected. What do the experts make of Netflix? It doesn’t make a lot of money, they reinvest it all and aren’t giving any to shareholders, they are massively over priced even against future expectations, so what does that mean? One of the highest momentum scores we have.

Analysts LOVE Netflix. Future revenue growth? Killing it. Future earnings growth? Consider it done. General sentiment and believe in their longevity? They have already bought it.

Will this change after their quarterly announcement this Tuesday? They appear to be putting out rather bullish (or tigerish?) statements and ramping up the excitement ahead of the announcement, but does that mean they are setting themselves too high expectations? If the analysts are anything to go by, they keep on impressing.

So is Netflix on your watchlist? Are you the 14% of analysts that say Sell, or the 67% that say buy? Or maybe you are waiting for The Irishman to finish so you can get back to your investing?

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Q1 earnings are out and investors are picking themselves up a new jetski’s. The only unknown if whether or not they look as good on them as, Tiger King FBI Informant and Star, James Garretson remains to be seen.

Here are some key facts and figures to binge on:

  • 15.77 million new paid net additions, double expections
  • 182.86 million total paying subscribers
  • $5.77 billion revenue and earnings per share of $1.57, analyst revenue targets hit but EPS just missed
  • 7.5 million global net additions targeted for Q2, this quarter is an unexpected spike
  • “No one knows how long it will be until we can safely restart physical production”, outside of dubs of existing content don’t expect any new Netflix specials unless they are already in editing and final stages, expect a dip in original content
  • Production and new content delays has freed up cash flow, making them more resilient during these times, seems the delays aren’t costing them enough to panic over

The share price seemed to be expected an over performance, which given the positive messages Netflix have been suggesting lately isn’t a surprise. Given the rather upbeat message of the quarterly report, even with the slowdown of original content, it seems the streaming crown still belongs to Netflix. :crown:

Also, an important change to their “viewing” figures and comparisons, the metric and measurement has changed.

Netflix now focuses on how many people chose to watch, which means how many people selected a given show or movie and watched at least two minutes.

By the company’s own admission, this method increases viewer counts by an average of 35%, so it’s hard to do an apples-to-apples comparison with numbers that the streaming service has released in past years.

Which brings us to the highlight of the announcement.

  • 64 million watched Tiger King :tiger:
  • 85 million watched Spenser Confidential :oncoming_police_car:

As Joe would roughly say, I’m sure this is something to do with that lady Carole Baskin.

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They dipped after their results yesterday, I went ballsy and went in at their bottom yesterday. Typically you see a short rally after a day like that, but the stock futures are so far disproving my thesis. :sob:

The great number of new paying subscribers were priced in it seems, that said there was some negative news and they did miss the EPS predictions.

That said, as a longer term play Netflix still looks a very strong company. You might not have hit the rally but I don’t think you’ll have to wait too much longer for it to be back in the money!

A few analysts are saying sell, but the majority are waving the buy flag (64% of them.) The momentum is incredibility high. As they hit their targets the risk will fade and the hopefully the share price will prop up (not too much as most these results do seem very priced in looking at the value.)

It won’t be a hold for me, they are $30 from their all time high in a market that is stupendously overvalued (NFLX P/E is nearly 84!) whilst they have also halted any new productions for a year.

The market will turn and they won’t be isolated from it, I am just hoping to ride a short-term post-earnings bounce for a week at max.

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Seems my NFLX thesis paid off, a 3.42% bounce and sold it off for a quick and tidy £284 profit.

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Great call. A strong open.

Be an interesting one to watch. The streaming wars are far from over and there will be more opportunities coming up.

A good write up on the streaming platforms and what they need to do so they don’t lose their customers. It’s unlikely we are going to have multiple subscriptions to every single service out there.

Looks I sold them at the peak. Nice.

Shifted the money to top up my gold producers ETF - up 7.38% today, only dwarfed by Greatland Gold which is up nearly 10% today. Am YOLO-ing my whole FreeTrade account between those. :crazy_face:

Am now in profit again compared to just before the crash.

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