DAMN. Up 10% today alone actually.
What’s the cause of this rise you ask? Subscriber earnings that were supposed to come in at 6 mil came in at over 8 mil. This company just doesn’t seem to be showing any signs of slowing down. Since 2012, the stock has increased over 23 times; a $10,000 investment would be worth $230,000 today. Unbelievable eh. The big question everyone is wondering is though; will these gains continue? At a market cap of over $100 billion should I enter the stock now? Can the gains continue? How much room for growth is still here?
Netflix’s P/E ratio is already high, coming in at about 200, implying that investors expect growth to continue. Revenues for 2017 came in at $11 billion, the last quarter came in at just over $3 billion. Does this justify a valuation of over $100 bn though? The subscriber growth suggests it may, but there are ALOT of challengers out there.
We already have the Amazon Prime, the Hulus, and with Disney entering on demand TV as well, Netflix has been splurging out on original content as they know that they are at the mercy of the content creators. Then there are other services like Youtube that continually poses a threat, and the ‘free for all’ not-so-legal options like Kodi.
Ah dear, these investments are never simple are they. Give me your thoughts, have you bought Netflix? Do you think the ship has sailed? Let us know; until next time!
