Articles for Time Warner Cable

Potential 40% Boost to Netflix from International Markets

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Monday, September 6th, 2010 by Trefis Team

The future looks bright for Netflix (NASDAQ:NFLX), which has built a strong position in the U.S. video rental market and is now going global. In an earlier article, we argued that the company’s new Canadian streaming video service could add more than 10% to our $85 stock price estimate for Netflix.

We see additional upside for the stock if Netflix can build significant subscriber bases in international markets beyond Canada. International expansion will also alter Netflix’s competitive landscape, which in the US, is dominated by large media players like Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), DirecTV (NASDAQ:DTV) and Dish Network (NASDAQ:DISH).

Our analysis of the international opportunity follows below.

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Fewer DVDs Mailed per Subscriber Can Help Netflix’s Stock

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Saturday, August 28th, 2010 by Trefis Team

We currently have a Trefis price estimate of $85 for Netflix’s (NASDAQ:NFLX) stock, about 33% below the current market price of $126. Netflix’s stock is impacted by the average Number of DVDs Mailed per Netflix Subscriber since this determines a large part of Netflix’s variable cost (the cost of processing and mailing out DVDs).

A desirable situation for Netflix is to have lots of monthly subscribers that rent few DVDs, but remain loyal subscribers due to the convenience of Netflix and the option to watch movies online through Netflix’s website. Such a situation could boost Netflix’s stock.

However, retaining subscribers that don’t use Netflix frequently won’t be easy since the company faces competition from pay TV players such as Time Warner Cable (NYSE:TWC), Comcast (NASDAQ:CMCSA), Dish Network (NASDAQ:DISH) and DirecTV (NASDAQ:DTV) that offer pay-per-view and video-on-demand options that are also convenient for existing pay TV subscribers.

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Higher CDMA Wireless Share Could Boost Sprint’s Stock

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Thursday, August 26th, 2010 by Trefis Team

Sprint’s (NYSE:S) stock could benefit significantly from higher CDMA wireless market share. Trefis members have created forecasts for two key drivers of Sprint Nextel’s stock over the last week: (1) Sprint CDMA’s wireless market share and (2) Sprint Mobile Subscriber Plan Pricing. We currently have a Trefis price estimate of $4.79 for Sprint Nextel’s stock, about 14% above the current market price of $4.19.

The member forecasts suggest that Sprint CDMA’s wireless market share will trend above the estimates of the in-house team of analysts at Trefis, while Sprint Mobile Subscriber Plan Pricing will roughly trend in-line. These projections indicate a combined upside of around 14% for Sprint’s stock. Sprint competes with AT&T (NYSE:T), Verizon (NYSE:VZ), Comcast (NASDAQ:CMCSA), and Time Warner Cable (NYSE:TWC) in mobile plans and phones business.

Sprint Nextel’s stock is quite sensitive to (1) Sprint CDMA’s wireless market share and (2) Sprint Mobile Subscriber Plan Pricing. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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AT&T’s Future Depends on Mobile Data

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Wednesday, August 25th, 2010 by Trefis Team

The average revenue per user (ARPU) for AT&T’s (NYSE:T) mobile data (SMS, internet, games) is expected to increase over the coming years, while AT&T’s average revenue per user for mobile voice services is projected to decline gradually.

Trefis members have created forecasts for two key drivers of AT&T’s stock over the last week: (1) SMS & Internet Revenue per AT&T Mobile Subscriber and (2) Mobile Subscriber Plan Pricing. The member forecasts suggest that both drivers will trend in-line with the estimates of the in-house team of analysts at Trefis.

AT&T competes with other mobile service providers Sprint Nextel (NYSE:S) and Verizon (NYSE:VZ) as well as VOIP providers Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC). We currently have a Trefis price estimate of $38 for AT&T’s stock, about 44% above the current market price of around $27.

AT&T’s stock is quite sensitive to (1) SMS & Internet Revenue per AT&T Mobile Subscriber and (2) Mobile Subscriber Plan Pricing. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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Latin America Could Lift DirecTV Stock by 13%

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Wednesday, August 25th, 2010 by Trefis Team

DirecTV (NASDAQ:DTV), is the largest satellite pay-TV provider in the U.S. Its main competitors in the pay-TV business include Dish Network (NASDAQ:DISH), AT&T (NYSE:T), Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), and Verizon (NYSE:VZ).

Although DirecTV’s Latin American division is experiencing fast subscriber growth, it constitutes only 8% of the company’s stock price according to our estimate, making it the least important division. The Latin America business contributes relatively little to DirecTV’s share value because of its high indirect costs, including capital expenditures and sales, general and administrative expenses (SG&A).

We see a potential 13% upside to the $38.53 Trefis price estimate for DirecTV’s stock if the company can reduce its Latin America expenses to match U.S. levels. Our analysis follows below. … To read the full article Subscribe to Trefis Pro

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Netflix Subscriber Growth Could Lift Stock by 20%

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Friday, August 20th, 2010 by Trefis Team

Higher-than-expected Netflix subscriber growth could boost the company’s stock (NASDAQ:NFLX) by close to 20%, according to Trefis member forecasts.

Trefis members have created forecasts for Netflix’s total number of subscribers, a key driver of the company’s stock price. The member forecasts suggest that the driver will trend above the estimates of the in-house team of analysts at Trefis.

Netflix competes with Comcast (NASDAQ:CMCSA), Dish Network (NASDAQ:DISH), DirecTV (NASDAQ:DTV), and Time Warner Cable (NYSE:TWC) in the pay-TV market. We currently have a Trefis price estimate of around $85 for Netflix’s stock, about 34% below the current market price of $129. Netflix’s stock is quite sensitive to fluctuations in its subscriber count. Below is a chart showing recent estimates created by Trefis members for this driver in detail.

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Smaller Decline in Netflix Monthly Subscription Fee Expected

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Thursday, August 19th, 2010 by Trefis Team

A smaller decline in Netflix’s (NASDAQ:NFLX) average subscription fee paid per subscriber could result in a potential upside of 14% for Netflix’s stock. Netflix competes with Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC), Dish Network (NASDAQ:DISH) and DirecTV (NASDAQ:DTV) in the pay-TV market. We currently have a Trefis price estimate of $85 for Netflix’s stock, about 33% below the current market price of $126.

Over the last week, Trefis members have created forecasts for the key driver Netflix Monthly Subscription Fee and their forecasts suggest that Netflix’s Monthly Subscription Fee will trend above the estimates of the in-house team of analysts at Trefis.

Netflix’s stock is quite sensitive to Monthly Netflix Subscription Fee. Below is the chart showing recent estimates created by Trefis members for the one driver in detail.

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TWC’s Digital Phone Margins Could Decline

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Tuesday, August 17th, 2010 by Trefis Team

Trefis members have created forecasts for two key drivers of Time Warner Cable’s (NYSE:TWC) stock over the last week: (1) Fee per Digital Phone Subscriber and (2) Digital Phone Gross Profit Margin. These forecasts suggest that Fee per Digital Phone Subscriber and as well as Digital Phone Gross Profit Margin will trend below the estimates of the in-house team of analysts at Trefis. These projections indicate a combined downside of 5% for the TWC stock.

Time Warner Cable digital phone (or VoIP) service competes with services offered by telecom operators AT&T (NYSE:T) and Verizon (NYSE:VZ), and cable operator Comcast (NASDAQ:CMCSA). We currently have a Trefis price estimate of around $48 for Time Warner Cable’s stock, about 11% below the current market price of close to $55.

We estimate Digital Phone accounts for 12% of Trefis estimate for TWC’s stock. Time Warner Cable’s stock is quite sensitive to (1) Fee per Digital Phone Subscriber and (2) Digital Phone Gross Profit Margin. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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Potential Upside to Dish’s Stock from Higher Pay-TV Share

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Tuesday, August 17th, 2010 by Trefis Team

Over the last week, Trefis members have created forecasts for Dish’s Pay TV Market Share, a key driver of Dish Network’s (NASDAQ:DISH) stock. The member forecasts suggest that Dish’s Pay TV Market Share will trend slightly above the estimates of the in-house team of analysts at Trefis.

Dish competes with Comcast (NASDAQ:CMCSA), DirecTV (NASDAQ:DTV) and Time Warner Cable (NYSE:TWC) in the pay-TV market space. We currently have a Trefis price estimate of around $26 for Dish Network’s stock, about 45% above the current market price of around $18.

Around 69% of Dish Network’s stock value can be attributed to its satellite TV business, and hence the stock is quite sensitive to Dish Network Pay TV Market Share.

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On-Demand Services Constitute a Small Portion of Comcast’s Stock

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Wednesday, August 11th, 2010 by Trefis Team

Comcast (NASDAQ:CMCSA) offers Video on Demand (VOD) and Pay Per View (PPV) services to its customers, and competes with Time Warner Cable (NYSE:TWC), DirecTV (NASDAQ:DTV), Dish Network (NASDAQ:DISH), Netflix (NASDAQ:NFLX). We currently have a Trefis price estimate of around $19 for Comcast’s stock, about 1% above the current market price of around $18.

Trefis members have created forecasts for two key drivers of Comcast’s stock over the last week: (1) Paid % of On-Demand Views and (2) On Demand Views. The members’ forecasts suggest that Paid % of On-Demand Views will trend slightly above the Trefis estimate, while On Demand Views will remain in line.

We estimate that PPV/On-Demand Services account for only 3% of the $19 Trefis price estimate for Comcast’s stock. Below are charts showing recent estimates created by Trefis members for the two drivers in detail: (1) Paid % of On-Demand Views and (2) On Demand Views.

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