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As a trader, you should never compound a mistake by repeating it. So forgive me. Yesterday, I suggested selling Netflix (NASDAQ:NFLX) after Whitney Tilson, a hedge fund manager with an uneven record on Netflix, suggested buying it, and the stock shot up as if Netflix CEO Reed Hastings had solved cold fusion.

Today: more madness. Yesterday's trade is turning against me (and in a big, bad hairy way) as a Citigroup analyst issued a buy. The stock was up about 7% in morning trading.

Problem is, this wasn't just any "Buy." It was a bumptious buy -- one that came harnessed to a price target that boggles the mind and bends reason.

That price target? $120.

That is more than twice what the stock was trading for when the analyst, Mark Mahaney, issued the call. Granted, at least Mahaney is putting his price target where his mouth is. Far too many analysts try to have it both ways. They come out with a "Buy," but it's a buy in name only. Their price target is a mere rock-skip higher. Mahaney is not hedging but by his own admission, risks abound. He cataloged sharply increased competition, uncertain international investments, and content acquisition controversies.

Let's get this straight: These are serious issues for a company and an industry still in its larval stage. The next person who can tell you for certain how they'll play out will be the first. This is especially true in the gathering level of competition, which is coming at Netflix from all quarters, including Verizon (NYSE:VZ), Amazon (NASDAQ:AMZN), Cablevision (NYSE:CVC), Comcast (NASDAQ:CMCSA), Time Warner (NYSE:TWX), Apple (NASDAQ:AAPL), and a myriad of startups.

Mahaney also puts a lot of trust in a Citigroup survey that points to an increase in the satisfaction level of Netflix customers. This is better news than not, but traders should not get carried away. Netflix is coming off of its pricing contretemps just over a year ago that nearly ruined it. A slight clawback in customer sentiment is to be expected. But with all the competition lurking, that measured show of greater satisfaction won't save the day.

Moreover, those happy customers are coming at a price that is not showing up on either the top or bottom line. In other words, Netflix is investing money in services that are improving the customer experience. That's hurting margins, but if it's helping the top line -- well, then you can make the case that Netflix can catch up.

But revenues are merely growing in the high single digits, which doesn't make the margin sacrifices seem worth it.

Netflix is expected to report a 4-cent September quarter, down from $1.16 in last year's September quarter and a loss in the following quarter as well. In such a fast-changing field the landscape can change six months out, so it's hard to believe in profits -- especially ones that will bring about a $120 price -- soon after that, which is why we suggest selling the stock … again.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Nattering Nabobs Of Netflix Negativism, Revisited