- NFLX Q4 subs add suggests considerable upside to estimate for FY15.
- Content inflation needs to be in check, making original content a top priority.
- Remain buyers of NFLX, a key beneficiary of cord-shaving trend.
Aggressive Spending Is Key To Netflix's International Momentum
- Netflix did well with international subscriber totals during the fourth quarter of 2014.
- Although U.S subscriber growth declined, the segment grew in terms of revenue and contribution profit.
- There has been a direct relationship between Netflix's cost of revenues & marketing and the increase in total international streaming members.
Netflix Pulls The Rug Out From Underneath The Bears
- Netflix may drive subscription revenue growth through increases in pricing as subscribers aren't actually that "sensitive" to pricing increases.
- China may become a potential market. Netflix indicates that the bulk of its international expansion will be completed in the next two years.
- Profitability and revenue are expected to ramp up at a very high rate, as both the cost structure and pricing structure offer meaningful room for growth.
- Netflix blew past earnings estimates, whereas sales beat consensus estimates slightly.
- Revenue will grow by 31% year-over-year in the next quarter, exceeding the 5-year average sales growth at 26%, which indicates that sales growth is accelerating.
Netflix Stock Forecast For 2015 Based On A Predictive Algorithm, Part II
- NFLX is up more than 18% Wednesday after its Tuesday earnings report.
- Strong subscription growth has been made possible because of international expansion.
- Netflix will complete its global expansion in the next two years, remaining profitable over that period.
- I Know First published a bullish forecast for Netflix on January 9th.
- NFLX beats on subs, obviously a key metric, but contribution margin for streaming hits a one year low.
- NFLX beats on profit due to a one time item and an unexplained change to a 0% (or so) tax rate.
- Why the stock is up over 10% after hours beats me.
- The forthcoming earnings report from Netflix will illuminate the importance of international growth.
- European countries like Germany, France and Switzerland should help meet subscriber growth forecasts.
- Competition from HBO Go and others will crop up in the question-and-answer session.
- Netflix is set to report Q4 earnings after-hours today.
- The market is expect 5% sequential growth in revenue and 4 million subscribers.
- Cost of sales - currently 68% - will be another key metric as competition for content is expected from CBS and HBO.
- A miss on any key metrics could cause double digit sell-off akin to Q3 2014. Netflix is a hold.
- Stuck between studios and technology giants, NFLX plays middleman to unsentimental clients.
- Now that NFLX has done everyone's R&D for them, the barrier to entry in on-demand streaming is extremely low.
- From now on, the battle will be uphill.
- NFLX is for traders, not investors. Don't buy the dip.
Does The Netflix Whisper Number Indicate Investor Confidence?
- The whisper number is $0.47, two cents ahead of the analysts' estimate.
- Netflix has a 68% positive surprise history (having topped the whisper in 15 of the 22 earnings reports for which we have data).
- The overall average post earnings price move is 'as expected' (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.
- Netflix is set to report after the bell on Tuesday.
- We think subscriber growth estimates are easily beatable.
- We stick with our bullish long-term outlook and think Netflix at $459 in the long term is reasonable.
Netflix Q4 2014 Preview: International Subs In Focus, Limited Margin Upside
- NFLX will report 4Q14 on Tuesday with consensus expecting $0.45 on revenue of $1.48b.
- International growth will be in focus due to decelerating domestic subs growth.
- Margin upside limited on higher content cost and FX headwind.
- The 33% selloff since last quarter represents an attractive entry point to this fast growth company.
- Much of the bear thesis surrounding Netflix competition and content costs are imperfect arguments and hold little bearing on Netflix's future growth prospects.
- Netflix's international growth opportunities are immense.
- A conservative discounted earnings analysis based on historical trends and management expectations represents 55% upside from today’s price.
- Netflix, Inc. (NFLX) is slated to report 4Q2014 earnings after the bell on Tuesday, January 20th.
- Earnings Per Share: Company guidance is $0.44. The current Street estimate is $0.45 (range $0.39 to $0.66).
- Revenues: Analysts expect an increase of 26.3% y/y to $1.48 bln (range $1.47 bln to $1.50 bln).
- As a customer, I like Netflix - I believe the streaming model is the future of "TV." As an investor, I need more than that.
- FCF took a hit in 2012 and has not recovered; it is still negative. Increased exclusive/original programming will likely continue to be a drag on FCF.
- I ran two scenarios: one sees Netflix as overvalued, the other sees Netflix as fully valued.
Netflix Stock Forecast For 2015 Based On A Predictive Algorithm
- Netflix stock fell over 20% immediately after its earnings report on October 15th, 2014, because of consumer growth not reaching expectations.
- Investors have expressed concerns over international expansion and content costs, but these are necessary for the company’s future.
- Expansion in European markets and new, attractive original content means Netflix stock is poised to make a strong recovery by the end of the year.
- The I Know First algorithm is bullish for Netflix in the three-month and one-year time horizon.
Netflix Unveils Key Dates For New 2015 Programming
- This week, Netflix unveiled launch dates for a number of new original series of shows.
- This roster of new shows is very important to Netflix as it represents the results of what has been a $3 billion investment in new programming.
- Netflix has deals with a number of top producers, actors and brands that combined should give subscribers a glut of new content.
Debunking Misconceptions Around Netflix Heading Into 2015
- Netflix remains a powerful force in the media industry going into 2015, after making some shrewd moves in 2014.
- Many believe Netflix is going to have a hard time launching new original series after just two breakout hits in recent years, but that theory has flaws.
- Netflix has the potential to make its slate of originals so powerful that its library of acquired series and movies becomes supplemental value.
- While Netflix has a number of competitors, it still has the most attractive pieces in place to draw in new subscribers.
3 Things You Need To Know About Netflix In 2015
- 2014 saw a number of major wins for Netflix through its original programming and new acquisitions.
- 2015 will see the results of all the hard work the network has put in over the previous year to help bolster its roster.
- In addition to returning shows like "House of Cards," the network has an arsenal of new originals in queue that could be just as popular.
- Given all the “firsts” achieved by Netflix this year, it stands to reason we will see a lot more in the not-too-distant future.
Netflix: Great For Subscribers, Terrible For Shareholders
- We believe Netflix is priced for a perfection that won't materialize and recommend investors avoid or sell.
- The company has suffered volatile earnings in spite of continued revenue gains.
- Investors buy profits, so they should not be seduced by the siren call of "growth".
- The company is in a competitive space, where consumers are fickle and where the capital costs are too high.
Wed, Jan. 21, 7:58 PM
- Netflix (NASDAQ:NFLX) content chief Ted Sarandos says the company is aiming for as many as 20 original series a year as it adjusts programming for various parts of the world.
- Sarandos gave the forecast during a panel breakout at the NAPTE conference in Miami.
- The theatrical release window was also a major topic of discussion after the news from earlier this week on Amazon pushing out theatrical releases.
- "It’s super-disconnected from what people want, " said Sarandos about the exhibitor model with the longer release window.
- NAPTE webcast
- Previously: Investors buying into Netflix global growth story
Wed, Jan. 21, 12:45 PM
Wed, Jan. 21, 9:14 AM
Wed, Jan. 21, 8:39 AM
- Shares of Netflix (NASDAQ:NFLX) are back over $400 for the first time since October after the company's EPS beat and sub guidance helped to lift sentiment.
- The two pullouts from the company's report and earnings call Q&A that have the attention of investors are the broad scale of the streamer's international expansion plan (200 nations by end of 2016) and the outlook for global profitability by the end of 2017.
- Earnings call transcript
- Previously: Netflix beats by $0.27, revenue in-line (Jan. 20 2015)
- Previously: Netflix higher after subscriber growth satisfies (Jan. 20 2015)
- NFLX +18.10% premarket to $412.30.
Tue, Jan. 20, 5:38 PM
Tue, Jan. 20, 4:18 PM
- Netflix (NASDAQ:NFLX) reports it added 1.90M net subscribers in the U.S. to edge its guidance of 1.85M and the consensus view of 1.83M.
- International net subs added were 2.43M vs. 2.15M guided and 2.17M consensus.
- Guidance for Q1 of 2015 is for 1.80M U.S. adds and 2.25M global.
- Total streaming contribution margin +140 bps Y/Y and - 440 bps Q/Q to 13.6% as the company's entry into new markets was a factor.
- Netflix says it will increase the percentage of original content spending over the next few years as new series continue to score highly.
- Piracy issues in new European markets are noted.
- Letter to shareholders (.pdf)
- Previously: Netflix beats by $0.27, revenue in-line (Jan. 20)
- NFLX +11.2% after-hours
Tue, Jan. 20, 4:06 PM
Mon, Jan. 19, 5:35 PM
Mon, Jan. 19, 10:16 AM
- Amazon Studios (NASDAQ:AMZN) announces it will produce up to 12 original movies a year.
- Film veteran Ted Hope will lead the creative development efforts from the studio.
- The movies will be available on Prime Instant Video only 30 to 60 days after releasing in theaters.
- Amazon is likely to keep its crowdsourced movie script competition part of the equation
- Netflix (NASDAQ:NFLX) and Amazon have won critical acclaim for their original content.
- What to watch: A move toward shorter theatrical windows in the industry hurts exhibitors (CKEC, AMC, CNK, RLD, IMAX, RDI, MCS).
- Previously: Upstarts land major trophies at Golden Globes (Jan. 12)
Fri, Jan. 16, 7:46 AM
- Netflix (NASDAQ:NFLX) is upgraded to Outperform by analysts at Cowen Research.
- A survey by the investment firm showed strong consumer ratings for the service in an indication its stickiness factor may top other streaming options.
- "Original programming should continue to improve subs metrics," reason analysts.
- Cowen sets a $382 price target on the stock on a view EPS will rise to $16 by 2019.
- NFLX +1.0% to $326.99.
Wed, Jan. 14, 4:08 AM
- Building on his previous call for the FCC to regulate broadband service as a utility, President Obama will push the FCC today to overturn state laws that prevent cities from building their own broadband networks.
- The centerpiece of the initiative is a call for the FCC to pre-empt laws in 19 states that can prevent cities and localities from building their own high-speed broadband networks.
- FCC Chairman Tom Wheeler has already indicated that he is strongly considering the move.
- Related Tickers: CMCSA, T, VZ, TWC, NFLX, CTL, CHTR, FTR, ELNK
Mon, Jan. 12, 11:57 AM
- Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) won major awards at the Golden Globes last night in a further confirmation of the influence of the streamers.
- Amazon Studios won the Best Series - Musical of Comedy for Transparent.
- Kevin Spacey took home best actor in a TV drama for House of Cards. In a well-timed move, Netflix also released the trailer for season 3 of House of Cards today (YouTube).
- In another win by an upstart, IFC Films (NASDAQ:AMCX) landed the trophy for Best Film with Boyhood.
Fri, Jan. 9, 5:40 PM
- Millennials value Netflix (NASDAQ:NFLX), according to a survey conducted in part by the Consumer Electronics Associations.
- 51% of millennials polled called Netflix very valuable.
- Broadcast TV earned the same classification by 42% of millennials and cable TV trailed at 36%.
- Only 55% of millennials called the TVs the preferred screen to watch content.
- Most media analysts think the new online TV services being unveiled this year are only a marginal threat to Netflix subscriber growth
- Related: Dish asks cord-cutters how does $20 per month sound? (Jan. 5)
Wed, Jan. 7, 4:55 PM
- Netlix (NASDAQ:NFLX) exec Todd Yellin confirms that the company plans to make announcements this year on expansion into new markets.
- The company ended Q3 with 50.3M global subscribes and guided for an add of 4M in Q4.
- A note from Citibank is making some hay out of a Netflix LinkedIn job posting asking for candidates fluent in Arabic, Hungarian, Italian, Japanese, Korean, Polish, and Vietnamese.
Mon, Jan. 5, 12:57 PM
- Dish Network (DISH -2.2%) says its new OTT Internet TV service will price at $20 per month.
- The Sling TV package includes content from ESPN, ESPN2, Disney Channel, ABC Family, HGTV, TNT, Food Network, Travel Channel, CNN, TBS, Cartoon Network, Adult Swim, and videos produced by Maker Studios.
- The reveal was made at a press conference in front of the Consumer Electronics Show.
- The launch of online TV packages has some bearing on Netflix (NFLX -4.8%), although there's plenty of support for the idea that the company's streaming service will be an add-on to new OTT players.
- More details from Sony (SNE -1.5%) are expected at CES on its PlayStation Vue which includes cable networks untethered from the pay-TV bundle.
Fri, Jan. 2, 1:14 PM
- Fresh off a roller-coaster 2014, Netflix (NASDAQ:NFLX) is starting 2015 by posting solid gains in spite of a 0.6% Nasdaq drop. Volume (1.3M shares vs. a 3-month daily average of 2.5M) has been moderate.
- This morning, Leichtman Research announced a November poll of 1,233 U.S. adults in households with a TV set found 36% of Netflix subs stream daily, and 72% weekly. Those figures are respectively up from 29% and 70% in an Oct. 2013 poll, and just 10% and 43% in a 2010 poll.
- Leichtman also reports 48% of cord-cutters have Netflix, compared with 36% of pay-TV subs. Whereas only 32% of pay-TV subs stream Netflix daily, 53% of cord-cutters do so.
- An RBC survey of U.S. consumers carried out a year ago found 44% stating they use Netflix, and 2/3 of them saying they're either "extremely satisfied" or "very satisfied" with the service.
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