After a disappointing 2011, Netflix (NASDAQ:NFLX) has had a fantastic start to 2012 with stock up nearly 70%. Half of this gain came after the company recently released its Q4 2011 results. As the company returned to growth in terms of net unique subscribers, it showed that it has recovered from the temporary slump of later half of 2011. The decline in DVD subscribers is being more than compensated by gain in streaming subscribers. The natural question that arises is – how high can Netflix’s stock go now? Below we present an optimistic scenario to understand this potential. Netflix competes with video rental companies such as Dish Network’s (NASDAQ:DISH) Blockbuster, Hulu and Amazon (NASDAQ:DISH) in the U.S. In international markets such as U.K, it competes with BskyB and Lovefilm.
Articles for Netflix
Netflix Can Hit $180 if its International Subscriber Base Reaches its US Size
Graph ItNEW!Wednesday, February 1st, 2012 by Trefis Team
Netflix is Fried, RIM is Toast – And Here’s Why You May be Wrong…
Graph ItNEW!Tuesday, January 31st, 2012 by Trefis Team
When you believe Netflix (NFLX) is fried, and RIM (RIMM) is toast, it is worth considering that there is a chance, just a possibility, the problem may be that you haven’t factored the entrepreneurs behind these companies and what they can do.
We love to extrapolate, and forecasting is important. However, we often use our own understanding of what is doable, rather than thinking carefully about the magicians behind the magic performed to date.
Netflix Shows Recovery in Streaming Business, Fair Value $133
Graph ItNEW!Friday, January 27th, 2012 by Trefis Team
Netflix (NASDAQ:NFLX) recently released its Q4 and full year 2011 results. As the company returned to growth in terms of net unique subscribers, the stock jumped significantly. We have raised our fair value for Netflix to $133, which now stands at a premium of about 15% to the market price. The earnings highlighted a couple of things – Netflix is back on growth track and DVD subscribers continue to decline substantially. A little confusing? The point is that customers are not leaving Netflix as much as before and a substantial decline is coming from subscribers dropping hybrid service and moving to streaming only. Netflix’s competitive advantage over other video rental companies such as Dish Network’s (NASDAQ:DISH) Blockbuster, Hulu and Amazon (NASDAQ:DISH) still remains.
Netflix’s Plans to Beef up Original Content is an Expensive Bet
Graph ItNEW!Friday, January 27th, 2012 by Trefis Team
Netflix’s (NASDAQ:NFLX) stock jumped as the company’s Q4 2011 results showed net subscriber losses reverting back to net growth. During the result announcement, management shed some light on its broader strategy including plans to as a pure-play subscription and not offering à la cart services, spending less on DVD marketing and continuing to invest more in original programming for its streaming services. The latter part of its strategy is somewhat influenced by Time Warner’s (NYSE:TWX) premium movie channel HBO, which spends about 40% of its budget on original programming. While this will give Netflix a further edge over competitors such as Blockbuster, Hulu and Amazon (NASDAQ:DISH), it may also imply some hardship ahead.
Netflix Earnings Should Confirm Recovery, $126 Fair Value
Graph ItNEW!Thursday, January 19th, 2012 by Trefis Team
Netflix (NASDAQ:NFLX) is going to announce its Q4 and full year 2011 results on Wednesday, January 25. As always, the earnings announcement is eagerly awaited given how the later half of 2011 has fared for Netflix. The stock has done well in the new year, and it will be interesting to see whether the trend continues after the earnings announcement. Netflix reported net subscriber losses in Q3 2011 and, whether that has continued or not in Q4, is going to be a major aspect to watch out for. It will be interesting to see how competitors such as Amazon (NASDAQ:NFLX), Dish Network’s (NASDAQ:DISH) Blockbuster and DVD rental company Redbox have affected Netflix’s Q4 subscriber growth.
Home Video Market Data Show That Convenience and Price Are Key to a Winning Strategy
Graph ItNEW!Tuesday, January 17th, 2012 by Trefis Team
While the overall home video market in the U.S. fell in 2011, certain trends emerged that demonstrate that it is not just the form – be it physical or electronic – that matters, but the convenience and price points also play a very critical role in determining how the home video business grows. Nevertheless the fall in DVD sales is a reason to worry for media companies like Time Warner (NYSE:TWX), Viacom (NASDAQ:VIA) and Disney (NYSE:DIS). For this reason, these companies are striking more online content licensing deals. Time Warner has even decided to increase the DVD sell-through window to 56 days, double the earlier period. Let’s take a quick look at 2011 home video market growth and what it means.
Netflix Updates: Stock Gains Momentum Ahead of Earnings
Graph ItNEW!Monday, January 16th, 2012 by Trefis Team
Netflix’s (NASDAQ:NFLX) stock continued its climb last week when it gained upon market entry in U.K. and comments from certain analysts and hedge fund managers. Last Monday Netflix launched its U.K. streaming service at a price of £5.99/month. The latest reviews suggest that while customers are appreciating the ease of use of Netflix’s service, the content remains a weak link. The picture quality is also variable depending upon the Internet connection speed. Nevertheless Netflix remains confident around its success in U.K. and Ireland, dismissing any concerns over competition from local streaming service Lovefilm. In the U.S., the company competes with Amazon (NASDAQ:AMZN), Hulu and Dish Network’s (NASDAQ:DISH) Blockbuster, as well as DVD rental companies such as Redbox.
Netflix Updates: Strong First Week of 2012 with More to Come
Graph ItNEW!Monday, January 9th, 2012 by Trefis Team
Netflix’s (NASDAQ:NFLX) stock took a pleasant turn and gained about 22% in the first trading week of 2012. Investors have rewarded the stock on account of couple of positive news items, even though more competition developed and a Needham & Co. analyst cut his estimates for 2012. Netflix primarily competes with streaming services such as those by Amazon (NASDAQ:AMZN) and Dish Network’s (NASDAQ:DISH) Blockbuster, as well as DVD rental companies such as Redbox.
Netflix Streaming to 20% of US Households an Hour a Day
Graph ItNEW!Friday, January 6th, 2012 by Trefis Team
Netflix‘s (NASDAQ:NFLX) stock rose by more than 10% on Wednesday when the company released its press release citing streaming data. The company mentioned that its customers streamed more than 2 billion hours of movies and TV shows in Q4 2011. The figure implies that Netflix is equivalent to the 15th largest cable network in the world, according to a BTIG Research analyst. What this also means is that about one-fifth of the U.S. TV households are spending more than an hour everyday watching Netflix’s content. Streaming is clearly a lucrative opportunity and has attracted several other competitors including Amazon (NASDAQ:AMZN) and Dish Network’s (NASDAQ:DISH) Blockbuster.
Netflix Overview: Sizing Up Our $125 Estimate After a Tough Year
Graph ItNEW!Thursday, January 5th, 2012 by Trefis Team
Netflix (NASDAQ:NFLX) is an online movie rental company that began its expansion in the U.S. by pioneering DVD-by-mail service. In the last two years, it has transformed the company from being a mainstream DVD rental provider to online movie streaming leader, ahead of newcomers like Amazon (NASDAQ:AMZN) and Dish Network’s (NASDAQ:DISH) Blockbuster. Exceptional subscriber growth, that lasted until few months back, highlighted this tremendous journey for Netflix. However, management’s poor decisions and communication regarding pricing and product changes have left Netflix struggling with subscriber defections. As a result of these missteps, the company’s stock took a hit dropping from about $300 by July 2011 to around $80 today.
Our current price estimate for Netflix stands at $126, implying a premium of about 60% to the market price. Our thesis is centered around Netflix’s ability to re-build its brand image in the U.S., its early-mover advantage that remains intact, and we believe it will be successful with its international expansion.
Netflix : All Articles
- Week of 2012-01-29
- 02/01/12 Netflix Can Hit $180 if its International Subscriber Base Reaches its US Size
- 01/31/12 Netflix is Fried, RIM is Toast – And Here’s Why You May be Wrong…
- Week of 2012-01-22
- 01/27/12 Netflix Shows Recovery in Streaming Business, Fair Value $133
- 01/27/12 Netflix’s Plans to Beef up Original Content is an Expensive Bet
- Week of 2012-01-15
- 01/19/12 Netflix Earnings Should Confirm Recovery, $126 Fair Value
- 01/17/12 Home Video Market Data Show That Convenience and Price Are Key to a Winning Strategy
- 01/16/12 Netflix Updates: Stock Gains Momentum Ahead of Earnings
- Week of 2012-01-08
- Week of 2012-01-01
- 01/06/12 Netflix Streaming to 20% of US Households an Hour a Day
- 01/05/12 Netflix Overview: Sizing Up Our $125 Estimate After a Tough Year
- 01/04/12 Netflix 2011 Review: Missteps Overshadow $126 Value & Growth Opportunity
- Week of 2011-12-25
- 12/28/11 Netflix’s Customer Satisfaction Drops, No Surprise But There’s a Silver Lining
- 12/26/11 Netflix Updates: U.K. Expansion Will Bring Challenges, $125 Fair Value
- Week of 2011-12-18
- 12/20/11 Netflix Updates: Rolls on with Content Deals, Market Ignores Verzion Takeout Noise
- 12/19/11 Verizon Would Have a Tough Time Acquiring Netflix
- 12/19/11 Netflix’s Revised $126 Estimate, U.S. Streaming is 60% of Value
- Week of 2011-12-11
- 12/15/11 Verizon Should Partner with Redbox, But Could Stream Solo Otherwise
- 12/15/11 If Verizon Buys Netflix, Juicy FiOS Revenues are at Risk
- 12/12/11 Netflix Confident in Recovery but HBO Could Spoil the Party
- Week of 2011-12-04
- Week of 2011-11-27
- Week of 2011-11-13
- Week of 2011-10-23
- 10/28/11 At $80 Netflix is Priced for Disaster, Revised Estimate is $142
- 10/27/11 Netflix’s Roll Out for Android App Slowed by Malware Threat
- 10/26/11 Netflix Revised to $142: U.S. Will Stabilize & Int’l Growth is Undervalued
- 10/25/11 Netflix Drop in Subscribers, Recovery Proving Difficult
- 10/24/11 Netflix Blunders Leave the Door Open for Amazon Prime
- Week of 2011-10-16
- 10/21/11 Netflix’s Mea Culpa Could Blunt Criticism in Earnings, Long-Term Outlook Solid
- 10/21/11 Netflix Earnings Preview: What We’re Watching Monday
- 10/17/11 Netflix’s Stock Continues Recovery post-Qwikster with Content Deals
- Week of 2011-10-09
- Week of 2011-10-02
- 10/07/11 Netflix’s New Deals Will Help Drive Growth While Market Frets
- 10/07/11 Netflix’s Ambitious International Expansion Faces Many Challenges
- 10/04/11 Netflix Adds Lilyhammer to Exclusive TV Show Line Up
- Week of 2011-09-25
- 09/29/11 As Stock Dives, Netflix Subscriber Churn Stabilizing: Bank Survey
- 09/29/11 Netflix Still the Default for Streaming Amid Influx of New Options
- 09/28/11 Given Netflix’s Upside, Buyout Talk is Nonsense
- 09/26/11 Netflix’s Volatility Indicates the Rising Fear of Slowing Growth
- Week of 2011-09-18
- 09/23/11 Trefis Weekly Notes: Media, Semis & Telecom
- 09/21/11 Netflix’s Slump is Overdone Despite Tone Deaf CEO
- 09/19/11 Netflix’s US and Int’l ARPU Should Converge with Qwikster Announcement
- 09/19/11 Hastings Apologizes, Announces DVD & Streaming Split for Netflix
- Week of 2011-09-11
- Week of 2011-09-04
- 09/07/11 Is Netflix to Blame for the Drop in US Pay-TV Subscriptions?
- 09/06/11 Netflix & Starz’s Breakup Highlights the Rising Costs of Netflix’s Growth
- Week of 2011-08-28
- Week of 2011-08-14
- 08/19/11 How Much are Amazon’s Streaming Efforts a Threat for Netflix?
- 08/18/11 Netflix’s Success Story Rides on International Growth
- 08/16/11 Netflix as a Defensive Play if the Economy Slows
- Week of 2011-08-07
- Week of 2011-07-24
- Week of 2011-07-17
- Week of 2011-07-10
- 07/16/11 Hulu with New Owners Could Spoil the Netflix Party
- 07/15/11 Telecom, Media & Semi Updates: NFLX, T, S, DISH & AMD
- 07/14/11 3 Reasons Netflix’s Stock Needs a Breather
- 07/13/11 Netflix Bets on Customer Loyalty as Higher Costs Force Price Hike
- Week of 2011-07-03
- Week of 2011-06-12
- Week of 2011-05-29
- Week of 2011-05-15
- 05/19/11 Netflix Subscriber Growth Needs to Skyrocket to Justify Stock Price
- 05/18/11 Netflix’s Android App Steals Some of Google’s Thunder
- Week of 2011-05-08
- 05/12/11 Should Netflix Worry About YouTube?
- 05/11/11 Netflix Riding a Positive Feedback Loop
- 05/09/11 Netflix May Go to Latin America Next, Our Take
- Week of 2011-05-01
- Week of 2011-04-24
- 04/28/11 Netflix Dismisses Cord Cutting Argument
- 04/25/11 Will Netflix Move to Personalized Streaming?
- 04/24/11 Earnings Watch – Netflix and Kimberly-Clark
- Week of 2011-04-17
- Week of 2011-04-10
- 04/12/11 The Trefis Top 5 – April 12 Insights
- 04/12/11 Cord Cutting Continues, But Be Cautious On Netflix Upside
- 04/12/11 Trefis Morning Coffee – Intel, Netflix, Amazon & L’Oreal
- 04/11/11 Dish Beefs up with Blockbuster Purchase
- Week of 2011-04-03
- Week of 2011-03-27
- 03/29/11 Why CBS Pulled Content from Netflix
- Week of 2011-03-20
- Week of 2011-03-13
- Week of 2011-03-06
- Week of 2011-02-27
- 02/28/11 Viacom’s Deal with Hulu Makes Sense
- Week of 2011-02-20
- Week of 2011-01-30
- 02/04/11 Time Warner Will Revisit DVD Deals with Netflix and Redbox
- 02/02/11 Video Streaming with a Side of Free 2-Day Shipping
- Week of 2011-01-23
- 01/25/11 After Strong Run, Do Cloud Stocks Need a Breather?
- 01/25/11 DirecTV Can Fight Online Streaming Platforms Through Product Differentiation
- 01/23/11 Trefis Picks of the Week for Telecom, Media, Technology & Retail
- Week of 2011-01-16
- 01/21/11 Verizon Weighs in on Comcast Net Neutrality Dispute
- 01/21/11 Outlook for Netflix After Elimination of DVD Queue from Streaming Devices
- 01/18/11 Could Comcast-NBC End Up Like Time Warner?
- Week of 2011-01-09
- 01/14/11 Kinect Expands Home Entertainment Beyond Gaming, Reinforces Stock Upside
- 01/14/11 Comcast-NBC Deal, What is Comcast’s End Game?
- Week of 2011-01-02
- Week of 2010-12-26
- 12/28/10 Google TV Could Threaten Key Revenue Streams for Broadcast Networks
- 12/28/10 Netflix Stock is a Risky Bet with Market Saturation on the Horizon
- Week of 2010-12-12
- 12/17/10 Netflix Seeing Shift Towards Fewer DVD Shipments
- 12/14/10 How Much Can Disney Gain from Netflix Deal?
- Week of 2010-12-05
- Week of 2010-11-28
- 12/03/10 Could Netflix Average Subscription Fees Rise?
- 11/30/10 News Corp’s Fox Studios Signs Blockbuster Rental Deal
- 11/30/10 Netflix’s New Pricing Plans & Streaming Only Offer
- Week of 2010-11-21
- Week of 2010-11-14
- Week of 2010-11-07
- Week of 2010-10-31
- 11/04/10 30% Netflix Upside From Falling Subscriber Acquisition Costs
- 11/01/10 Expectations for 55 Million Netflix Subscribers
- Week of 2010-10-24
- Week of 2010-10-17
- Week of 2010-09-26
- 09/28/10 Slower Decline in Netflix’s Subscription Fee Expected
- 09/27/10 Blockbuster Bankruptcy: Good or Bad for Netflix?
- Week of 2010-09-19
- Week of 2010-09-12
- 09/16/10 YouTube’s Pay-Per-View Service Won’t Move Google’s Stock
- 09/16/10 Will Netflix Feel the Squeeze From Higher Streaming Costs?
- Week of 2010-09-05
- 09/09/10 So Far, Netflix is the Video Service to Beat
- 09/06/10 Potential 40% Boost to Netflix from International Markets
- Week of 2010-08-29
- 09/03/10 New iPod & Ping Practically Irrelevant for Apple’s Stock
- 08/31/10 Is Apple Entering the Streaming Video Market?
- 08/30/10 Can Redbox Challenge Netflix Online?
- Week of 2010-08-22
- 08/28/10 Fewer DVDs Mailed per Subscriber Can Help Netflix’s Stock
- 08/26/10 Netflix Canada Could Lift Stock by 10%
- Week of 2010-08-15
- 08/20/10 Netflix Subscriber Growth Could Lift Stock by 20%
- 08/20/10 Streaming Video Promises 15% Upside for Netflix Stock
- 08/19/10 Smaller Decline in Netflix Monthly Subscription Fee Expected
- Week of 2010-08-08
- 08/11/10 On-Demand Services Constitute a Small Portion of Comcast’s Stock
- 08/10/10 Expectations for Netflix’s Costs In Line with Trefis Forecasts
- Week of 2010-08-01
- 08/05/10 More Subscribers Combined with Fewer DVD Shipments Could Boost Netflix’s Stock
- 08/04/10 Netflix Challenges Cable and Satellite Operators
- 08/03/10 4% Netflix Downside from Proposed USPS Rate Hikes
- Week of 2010-07-25
- Week of 2010-07-18
- 07/23/10 Slow DVD Growth Frees Cash for Netflix
- 07/23/10 Trefis Members More Bullish on Netflix Subs, 60% Upside to NFLX
- Week of 2010-07-11
- 07/15/10 45% Upside to Netflix’s Stock on Higher Fees and More Subs
- 07/12/10 Hulu Plus Not an Immediate Threat to Netflix
- Week of 2010-07-04
- 07/06/10 Higher Subscription Fees Equal 15% Upside for Netflix Stock
- 07/05/10 Netflix Fights Comcast for Video Rental Supremacy
- Week of 2010-06-20
- Week of 2010-06-13
- Week of 2010-06-06
- Week of 2010-05-16
- Week of 2010-05-09
- Week of 2010-05-02
- Week of 2010-04-25
- 04/27/10 Sensitizing Netflix’s Stock Price To Subscriber Growth
- 04/26/10 What Does $100+ Stock Price Mean For Netflix?
- Week of 2010-04-18
- Week of 2010-04-11
- Week of 2010-04-04
- Week of 2010-03-28
- Week of 2010-03-21
- 03/26/10 DVD Purchase Limits By Walmart and Target Can Benefit Netflix’s Stock
- 03/24/10 Netflix’s Stock Can Benefit as Movie Studios Favor Video-on-Demand
- 03/22/10 Akamai’s Netflix Deal Signals the Company’s New Competitiveness
- Week of 2010-03-14
- Week of 2010-03-07
- Week of 2010-02-28
- Week of 2010-02-21
- 02/26/10 Featured Forecast: Netflix Subscribers to Double by 2016
- 02/23/10 Comcast’s On-Demand Video Service Worth More than 30x Blockbuster
- Week of 2010-01-31
- 02/02/10 Disney May Raise Costs for Netflix
- 01/31/10 Netflix: Declining revenue per subscriber and increasing DVD shipment costs
- Week of 2010-01-24
- Week of 2010-01-10
- Week of 2009-12-20
- Week of 2009-11-29
- 12/01/09 Is Netflix’s CEO Reed Hastings wooing Comcast? (Part 2 of 2)
- 11/30/09 Is Netflix’s CEO Reed Hastings wooing Comcast?
- Week of 2009-10-25
- Week of 2009-10-11
- 10/12/09 Netflix CEO confirms shift from DVD to streaming video; stock could be at $70 (+50% upside)
- Week of 2009-09-27
- Week of 2009-09-06
- Week of 2009-08-23