Everything you need to know about trading Netflix now…

While we’re at it, I’m reading through my own analysis and numbers…so let’s share this one too.  Here’s the fundamental analysis on Netflix in the report.


NFLX – Netflix, Inc.


Netflix, Inc. provides online subscription rental services in the United States.

Balance Sheet

Cash and Cash Equivalents:  150 M

Short Term Investments:  192 M

Long term Investments:  –0

Total Cash:  342 M

Total Debt: 234 M

Net Cash:  108 M

Outstanding Shares:  53 M

Net Cash / Share:  2.0

Share Price:  249

Enterprise Value / Share:  247

Total Market Cap:  13 B

Enterprise Value:  12.9 B

2012  Sales Growth:  33.8%

2011 Earnings Estimate:  6.53

Enterprise Value Multiple:  37 Times Forward Earnings

Dividend & Yield:  N/A

Netflix has finally fulfilled its namesake; for the first time, 2011 will see it deliver more movies via the internet than by mail. It is the unquestionable de facto standard for premium video content on delivery and has inspired the cable networks and even HBO, to imitate with their own streaming iPad apps.

Now at 20 million subscribers, Netflix projects it will be in 1 out of 10 homes American within two years time. While it is facing higher costs from content owners, its explosive growth and a potential overseas roll-out overshadows any financial road bumps. The cable operators are doing everything they can to stem subscribers from ‘cutting the cord’ and keeping only Netflix; in an act of desperation they are even letting delinquent customers pay later, just so they can that deny Netflix has gained ground.

Its success being so public and well-covered and its technology so-of-the-moment, the obvious benefits and growth of Netflix has made its stock a high flyer. It’s trading at 37x forward earnings and has run over every prominent short-er of the company. Up almost 500% in the last two years, Netflix will experience huge growth at the expense of traditional content delivery systems, and can format its service to be delivered as an App through any platform. Just be cautious on overpaying during any earning season ramp-up and pick your spots to build a position on pull-backs.