Seeking Alpha

Netflix lower on bearish Barclays call

  • Barclays has started Netflix (NFLX -1.1%) with an Underweight and $390 PT. The firm is worried about the streaming giant's valuation and slowing international profits.
  • Netflix's international ops posted a $35M op. loss n Q1, a figure that contrasted sharply with the $201M op. profit posted by its U.S. streaming ops.
  • But international op. loss is expected to fall to $12M in Q2, and (in spite of aggressive European expansion plans) Netflix has said the business is "on a path to achieve profitability this year."
  • Shares currently go for 4.8x 2014E sales, and 4x 2015E sales.
From other sites
Comments (4)
  • GoingLong
    , contributor
    Comments (148) | Send Message
     
    Insiders along with CEO Reed Hastings are also selling shares. To his credit Hastings has also warned and attributes the elevated stock price even when it was trading well below $400 to the momentum traders.

     

    If you look at the 6 month chart... take notice of what appears to be a "Major Double Top". The previous top formed late Feb. into early March 2014 with 52 week high of $458. You will also see the double top forming when it hit $450.82 last week. The last 52 week high was $458 followed by a drop of more than 25% (actually near 35%) followed by this 50% rise since only early March 2014.

     

    The possibility of a reversal should be concerning to those thinking of going long the stock.
    26 Jun 2014, 10:19 AM Reply Like
  • Sakelaris
    , contributor
    Comments (1673) | Send Message
     
    I am assuming that my friend GoingLong is referring to the following article:

     

    http://seekingalpha.co...

     

    To give perspective, NONE of the six insiders being referenced reduced their shares by more than 53%, and the sales by two of the six (including Reed Hastings) were actually miniscule as a percentage of their total holdings.
    26 Jun 2014, 12:40 PM Reply Like
  • requiro
    , contributor
    Comments (4) | Send Message
     
    Netflix's streaming service is unviable over Verizon, and word is getting out that the business may revert to the old "Qwikster" DVDs through the mail model.
    28 Jun 2014, 05:13 AM Reply Like
  • Sakelaris
    , contributor
    Comments (1673) | Send Message
     
    "Unviable" is not a word. But please, explain what you are trying to say about Verizon and also about the Quikster model.
    28 Jun 2014, 08:40 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs