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.
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Ket Garden
Shiny bull 