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Roku and Netflix Have Your Living Room on Lock

6 years ago
It's never too late to start accepting Roku (NASDAQ: ROKU) and Netflix (NASDAQ: NFLX) as the entertainment leaders of the new normal. KeyBanc analyst Justin Patterson is initiating coverage of the two streaming video powerhouses with bullish overweight ratings. 
The Motley Fool

ViacomCBS Sells CNET for $500 Million

6 years ago
The popular and durable CNET tech news and reviews internet portal is about to have a new owner. Entertainment conglomerate ViacomCBS (NASDAQ: VIA) has signed a definitive agreement to sell CNET's parent, CNET Media Group, for $500 million to privately held Red Ventures, both co
The Motley Fool

Here's My Top Growth Stock to Buy Right Now

6 years ago
It was a tough week for investors, particularly for those with a portfolio heavily invested in tech companies. Highlighting the outsize decline in tech during the week, the tech-heavy Nasdaq fell about 3.6%, while the S&P 500 only declined about 2.5%.
The Motley Fool

A Deep Dive Into Etsy

6 years ago
In this episode of Industry Focus: Consumer Goods, host Emily Flippen and Motley Fool contributor Dan Kline bring you all the most important and relevant facts about e-commerce niche player Etsy (NASDAQ: ETSY). They'll cover its business basics, what makes it unique and gives it
The Motley Fool

Netflix: Great Company, Fairly Valued Stock

6 years ago

Red-hot tech stocks fell off a cliff this month, and Netflix (NFLX) stock was no exception -- the stock tumbled nearly 13%. Nevertheless, 2020 so far has been bountiful enough for a stock boosted by the coronavirus tailwinds, with shares up by 49% year-to-date.  

So, can Netflix resume the accumulation of share gains? Or has momentum run its course for now?

According to Raymond James' Andrew Marok, there is currently “limited potential for positive revisions and multiple expansion until more certainty is gained around the post-COVID-19 trajectory.” In other words, the analyst believes NFLX is trading at a lofty valuation and, as such, rates the stock a Market Perform (i.e. Hold). (To watch Marok’s track record, click here)

The analyst has no doubt Netflix is a great company and said, “We are positive on NFLX’s positioning within the large and growing video-on-demand space, given 1) its position as the dominant global video-on-demand player; 2) competitive advantages in content development and distribution; and 3) improving financial position with expanding operating margins and decreasing FCF deficits/reliance on external financing. We continue to view NFLX as a long-term winner in the expanding video-on-demand space.”

Additionally, the analyst doesn’t count the recent entry of other heavyweights such as Apple TV+, Disney+, HBO Max, and Peacock into the streaming arena as necessarily a threat. The analyst sees room for “multiple winners in the space as the pie grows.”

That said, as some consumers will look out for particular content only available on other platforms, Marok expects there is “likely to be some subscriber impact at the margin.” Furthermore, as the new players are priced to take share, there could also be a “limit on near-term pricing power in developed markets.”

Moreover, the last several years have taken their toll on the company’s FCF (free cash flow) as the heavy investment in content has resulted in FCF deficits. With the long term in mind, however, Marok expects the “company's growth will begin to overtake the growth in content investment, with Netflix reaching FCF breakeven in 2024E.”

Among Marok’s colleagues, the tone is slightly more bullish. NFLX's Moderate Buy consensus rating is based on 20 Buys, 10 Holds and 5 Sells. Meanwhile, an 8% upside could be in the cards, should the $520.43 average price target be met over the next months. (See Netflix stock-price forecast on TipRanks)

To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

TipRanks

Sorry, Jim Cramer, Spotify Is Not the Next Netflix

6 years ago
It's been three months since CNBC's Mad Money host Jim Cramer mentioned that Spotify (NYSE: SPOT) was starting to mirror the Netflix (NASDAQ: NFLX) success story. Spotify's push to beef up its podcasts is being likened to Netflix when it made its push for exclusive content. Cra
The Motley Fool
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