Feb. 24, 2014, 6:41 PM
- Verizon (VZ) and AT&T (T) have confirmed that they, too, are talking with Netflix (NFLX +3.4%) about direct peering deals. Verizon CEO Lowell McAdam says his company's talks with the streaming giant have been going on for about a year.
- Netflix shares closed the day with strong gains, as analysts argued direct peering deals such as the one just reached with Comcast could end up having a neutral or even positive impact on Netflix's bandwidth costs, given the company will no longer have to pay intermediaries such as Cogent (CCOI -6.8%).
- Dan Rayburn: "It should actually be cheaper for Netflix to buy direct from Comcast, and they also get an SLA, which also improves quality ... While I don’t know the price Comcast is charging Netflix, I can guarantee you it’s at the fair market price for transit."
- Others aren't convinced direct peering deals are a positive. The Washington Post: "Cogent has many competitors. Verizon's FiOS service does not. If companies like Cogent are squeezed out of business, it will make these already powerful network owners even more powerful."
- GigaOm: "These agreements aren’t transparent ... rates could go up over time, and they essentially act as a tax on the Internet."
Jan. 23, 2014, 12:47 PM
Jan. 23, 2014, 9:12 AM| Comment!
Jan. 23, 2014, 9:11 AM
- Analysts are full of commentary on Netflix (NFLX) after the company ran a clean sweep of besting estimates on various metrics, but Needham might have the most interesting early analysis.
- Sizzling subscriber growth and margin momentum are just the start as the investment firm is convinced that even at Netflix's lofty trading price, investors are discounting the potential for explosive profit growth with the international business.
- There's also a reminder that the DVD business, though strategically not a factor anymore, is still a driver of free cash flow.
- Shares are rated a Buy with a price target of $425.
- NFLX +17.3% premarket to $391.60.
Jan. 22, 2014, 4:10 PM
- Netflix (NFLX) soars in the after-hours session after beating on both lines with its Q4 report and showing plenty of momentum with subscriber growth.
- The company added 2.33M subscribers in the U.S., compared to the company's guidance for a gain of 1.61M-2.41M subscribers. Analysts expected U.S. subscriber additions of around 2.05M.
- International net additions during the quarter came in at 1.74M, up 300K Q/Q and down slightly from the year-ago period.
- Streaming margin was 23.4%, just ahead of guidance of 23.2% and down 30 bps Q/Q.
- The forecast for Q1 2014 is for an addition of another 2.25M subscribers in the U.S. and 1.60M international subscribers.
- Netflix shareholder letter (.pdf)
- NFLX +13.5% to $378.80 AH
Jan. 22, 2014, 4:03 PM
Jan. 21, 2014, 10:57 AM
- Ahead of tomorrow's Q4 report, Needham's Laura Martin has lowered her Netflix (NFLX -2.3%) estimates below consensus. The move comes just three months after Martin started coverage on Netflix with a Buy and $425 PT.
- Pac Crest (Sector Perform) is also out with a cautious note on Netflix: Though believing Q4 results will be in-line, the firm is worried U.S. growth will slow going forward.
- Shares remain up over 5x from their fall 2012 lows.
Jan. 15, 2014, 11:43 AM
- After trading sideways yesterday (in the face of a market rally) following an appeals court's decision to throw out the FCC's wireline net neutrality rules, Netflix (NFLX -4.9%) is diving today.
- Wedbush's Michael Pachter (Underperform) thinks ISPs could try to charge Netflix and others a fee for every GB of data transmitted over their networks. He notes each hour of SD and 1080p video streamed by Netflix to 40"-50" TV sets respectively consumes 1GB and 6.5GB of data.
- Though services such as Netflix drive demand for high-speed connections, U.S. ISPs (many of whom double as pay-TV providers) have nonetheless been upset over the streaming giant's heavy data consumption. Netflix has been trying to address the issue via its Open Connect CDN, but not all major ISPs are on board.
- FCC chairman Tom Wheeler has already said his agency might appeal yesterday's ruling, so as to guarantee "networks on which the Internet depends continue to provide a free and open platform for innovation and expression."
- Wheeler previously suggested Netflix could pay ISPs to guarantee subscribers "receive the best possible transmission." But he also reiterated his opposition to allowing ISPs to block/limit services.
Jan. 7, 2014, 7:05 AM| 4 Comments
Dec. 27, 2013, 1:54 PM
- With high-flying Twitter (downgraded by Macquarie) leading the way, several Internet momentum plays that have delivered big 2013 gains are seeing some year-end profit-taking.
- In addition to Twitter, notable decliners include Netflix (NFLX -2.8%), Pandora (P -3.6%), Trulia (TRLA -2.7%), Zillow (Z -2.4%), and Groupon (GRPN -1.9%).
- On the other hand, many Chinese Internet names are adding to this year's gains. In addition to Baidu (buying Perfect World's e-book unit) and Ctrip (received a bullish T.H. Capital note), gainers include Sina (SINA +4.9%), Dangdang (DANG +4.8%), YY (YY +4%), 58.com (WUBA +3%), and NetEase (NTES +3.4%). An overnight Shanghai rally is likely helping.
Dec. 10, 2013, 1:34 PM
- Though still generally below their mid-October highs, Internet momentum stocks are turning in what might be their best performance during a rally that has now lasted two weeks. While Twitter (previous) is the star of the show, Facebook (FB +3.5%), Yelp (YELP +1.8%), Groupon (GRPN +4.7%), Netflix (NFLX +2.1%), LinkedIn (LNKD +1.4%), and Pandora (P +3.4%) aren't getting left out.
- Several Chinese Internet names are also higher. In addition to Baidu, which is benefiting from a bullish Pac Crest note, Sina (SINA +6%), Ctrip (CTRP +6.1%), Qunar (QUNR +6.3%), and Youku (YOKU +3.9%) are staring at big gains.
- Morgan Stanley's Scott Devitt is out with another bullish note on Groupon. Devitt notes an MS survey of 358 SMBs found only 26% of merchants have run Groupon deals in the last 12 months, something he thinks suggests there's "a long run way of merchants" that can still be signed up.
- He also sees room for Groupon to improve its customer targeting - the company still isn't able to track which deals were shown to customers, or were clicked on, in prior e-mails - and expects its new site (allows deals to be browsed without an e-mail address being given) and a revamped e-mail layout to boost growth.
Oct. 22, 2013, 5:16 PM
- In a new 13D, Carl Icahn discloses he has lowered his stake in Netflix (NFLX) to 4.52%. Icahn had nearly a 10% stake in the company when he first disclosed his investment a year ago.
- Shares are up over 4x since Icahn first bought in. He admitted earlier this month Netflix's run-up meant shares are no longer a "no-brainer."
- NFLX -2.2% AH after falling 9.2% in regular trading.
- Earlier: Netflix turns negative post-earnings
- Update: Icahn pared his stake in part by unloading 2.4M Netflix shares earlier today at $341.44. Shares are currently at $317 AH.
- Update 2: Icahn on Twitter: "Sold block of NFLX today. Wish to thank Reed Hastings, Ted Sarandos, NFLX team, and last but not least Kevin Spacey."
Oct. 22, 2013, 11:04 AM
- That "momentum investor-fueled euphoria" Reed Hastings (NFLX -4.1%) referenced in Netflix's Q3 shareholder letter is dissipating just a bit today, as investors take profits in spite of strong Q3 U.S. and international subscriber adds, and above-consensus Q4 EPS guidance. Evercore has upgraded shares to Equal Weight, but S&P has cut them to Sell.
- Two possible concerns: Hastings' remarks about "low quality" Latin American free trial promotions boosting Q3 international adds, and the fact free cash flow fell Q/Q to $7M thanks to major content investments. Of course, shares remain up 268% YTD.
- Janney's Tony Wilbe remains quite bullish, arguing shares could reach $700 with the help of continued sub growth and a $1/month price hike. JPMorgan's Doug Anmuth has raised his PT all the way to $460 from $340, and Needham's Laura Martin (Buy, $425 PT) thinks margin expansion is ahead of schedule, given Q3 margins hit estimates in spite of an extra $27M in amortization costs.
- CC transcript
Oct. 22, 2013, 9:14 AM
Oct. 21, 2013, 4:12 PM
- Netflix (NFLX) reports it added 1.29M subscribers in the U.S. during Q3, compared to a 630K gain for Q2 and guidance for 700K-1.2M adds. Some analyst estimates pegged the quarterly net adds higher, but the upward momentum is more than enough to satisfy investors.
- Total U.S. subscribers at the end of the quarter was 31.09M vs. 30M expected and 28.7M for rival HBO.
- The company says it expects to double its investment in original content, although still keeping the spend below 10% of total content expenses.
- Q4 guidance is for net additions of 2.01M which is above the estimates of some analysts.(shareholder letter .pdf)
- NFLX +9.5% AH.
Oct. 21, 2013, 4:01 PM
NFLX vs. ETF Alternatives
Netflix Inc operates as an Internet television network providing TV shows & movies which include original series, documentaries & feature films. The Company has three segments namely Domestic streaming, International streaming & Domestic DVD.
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