Netflix up 17,96%

Netflix (NFLX) surged 17,96% in after-hours trading yesterday after reporting better than expected results in their Q4 report. They have a strong gain in new subscribers in the U.S, and we are talking about video-streaming subscribers. They added 2,33 million new U.S video-streaming members and have total of 33,4 million subscribers. With the International subscribers, they now have more than 44 million members.

Netflix say they will continue to grow in Q1 this year, and the forecast is 2,25 million new members in the U.S and 1,6 million new users in overseas markets. They say that they expect to report earnings of 78 cents a share in Q1.

The company reported earnings of $48 million, or 79 cents a share, on $1,18 billion in revenue in Q4, 2013. In Q4, 2012, they reported profit of $8 million, or 13 cents a share, on sales of $945 million. A sales growth of 23,30%. That is a great lift.

Netflix is trading at $333,73, and that is 80 times the 2014 EPS estimate. The stock is overvalued, and fair value is estimated to be $180. Netflix will grow, but they have big competition. Don`t forget the history in this stock. This stock very volatile. So far this year, the stock is down -9,4%.

Just for fun; let`s take a look at their ROA compared with some of their competitors. Have a look at the chart below:

Company Market Cap ROA
Target 37,3 Bill 5
Dish Network`s 25,9 Bill 4
Netflix 19,8 Bill 1,7
Verizone 135,4 Bill 0,9
Amazone 185,2 Bill 0,5
Blockbuster 1,5 Mill -20

It has been a great week so far, with no «noice» from the Fed. No major reports this week, except today. Probably not so good for day traders who trade on these news, but great for the investors, so they can focusing on the stock market, company`s earnings and all the Q4 reports coming out at the moment.

Reports today: Unemployment Claims at 8:30am, Flash Manufacturing PMI at 9:00am, Existing Home Sales at 10:00am, Crude Oil Inventories 11:00am.

Reed Hastings

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication

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