NFLX

Netflix Inc.

TMT


Presented:05/14/2014
Price:$50.27
Cap:$21.10B
Current Price:$705.98
Cap:$302.98B

Presented

Date05/14/2014
Price$50.27
Market Cap$21.10B
Ent Value$20.33B
P/E Ratio106.39x
Book Value$4.39
Div YieldN/A
Shares O/S419.63M
Ave Daily Vol22,820,000
Short Int9.07%

Current

Price$705.98
Market Cap$302.98B
Netflix, Inc. provides Internet television network service that enables subscribers to stream TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. The company operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD. The Domestic Streaming segment offers access to content delivered over the Internet to various connected devices, such as PCs, Macs, game consoles, smart TVs, Blu-ray players, hone theatre systems, Internet video players, digital video recorders, and mobile devices. The International Streaming segment engages in the streaming services primarily in Canada, Latin America, the United Kingdom, Ireland, Finland, Denmark, Sweden, and Norway. The Domestic DVD segment provides DVDs-by-mail subscription services. The company also provides standard definition DVDs and Blu-ray discs to its subscribers in the United States. The company was founded in 1997 and is headquartered in Los Gatos, California.

Please note, this stock split on 7/15/2015 at a ratio of 7/1. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $351.88.

Publicly traded companies mentioned herein: Netflix, Inc. (NFLX), Comcast (CMCSA)

Highlights

Based on 2014 Street estimates, shares of Netflix (NFLX) are presently trading at a P/E of roughly 83x, and a 34x EV/ EBITDA multiple. While these are rich multiples, the presenter believes people misunderstand/ underestimate the ultimate profitability of NFLX, and is long shares. Based on “reasonable assumptions” NFLX should be able to get to 45 million subscribers in the US by the end of 2015, and the company has already announced a price increase. Based on $9 per-month, per sub, it is not difficult to see NFLX at a $5 billion annual revenue run rate (just US streaming) over the next 18-24 months.

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Idea Discussion

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