{"id":273,"date":"2018-04-17T22:27:15","date_gmt":"2018-04-17T22:27:15","guid":{"rendered":"http:\/\/www.cheapertrader.com\/?p=273"},"modified":"2018-04-18T21:49:10","modified_gmt":"2018-04-18T21:49:10","slug":"netflix-is-not-slowing-down-another-9-rise-today","status":"publish","type":"post","link":"https:\/\/www.cheapertrader.com\/index.php\/2018\/04\/17\/netflix-is-not-slowing-down-another-9-rise-today\/","title":{"rendered":"Netflix is not slowing down &#8211; another 9% rise today"},"content":{"rendered":"<p>Netflix has risen 9% today on the back of some stunning numbers\u00a0from their <a href=\"https:\/\/ir.netflix.com\/static-files\/419958ac-5fd7-4bcd-9fb1-ebca445a9016\">first quarter release<\/a>. Let&#8217;s take a look at some of the stats from the release<\/p>\n<ul>\n<li>Revenue grew 43% year over year for Q1, the fastest pace in their history, but primarily down to increases in the ASP of the service<\/li>\n<li>Operating margin grew 12% year over year<\/li>\n<li>Global net additions for Q1 were 7.41 mln members, up 50% year over year and ahead of forecasts<\/li>\n<li>The company will be spending $7-8 bln in content this year<\/li>\n<li>The company generated $3.6 bln in revenue for Q1, EBITDA of $534 mln<\/li>\n<\/ul>\n<p>Netflix&#8217;s market cap is now a massive $145 bln.\u00a0 Given that the yearly run rate of revenue assuming Q1&#8217;s numbers is $14.4bln and EBITDA of $2 bln, it is easy to think that the $145bln\u00a0valuation\u00a0is\u00a0too high.<\/p>\n<p><script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script><br \/>\n<ins class=\"adsbygoogle\" style=\"display: block; text-align: center;\" data-ad-slot=\"5410859267\" data-ad-client=\"ca-pub-3153294147011912\" data-ad-format=\"fluid\" data-ad-layout=\"in-article\"><\/ins><br \/>\n<script>\n     (adsbygoogle = window.adsbygoogle || []).push({});\n<\/script><\/p>\n<p>However, I believe that the real\u00a0revenue potential of Netflix isn&#8217;t in streaming, although it&#8217;s clear that streaming\u00a0will continue to generate increased revenues for the foreseeable future.\u00a0I believe that the real revenue potential is in the content creation and the associated potential of spin-offs from\u00a0the\u00a0$8 bln of content Netflix is\u00a0creating every single year.<\/p>\n<p>We&#8217;ve seen\u00a0before how media content can turn companies into billion dollar companies. Let&#8217;s take for instance LucasArts, which transformed Star Wars into a real franchise that included\u00a0not only movies and\u00a0TV shows, but also introduced several other additional revenue streams via video games &amp; toys. Lucas Arts was acquired by Disney for $4 bln, a price <a href=\"https:\/\/www.wired.com\/2015\/12\/disney-star-wars-return-on-investment\/\">many believe was undervalued<\/a>.<\/p>\n<p>Pixar is another example of how content can transform a company into a multi-billion dollar machine. Pixar got off to a slow start but from the early 2000s, the company began to\u00a0release multiple animated films. The result?\u00a0The company was eventually\u00a0<a href=\"https:\/\/www.google.co.uk\/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=2&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiviIeKq8LaAhXiKMAKHUkkDqgQFggsMAE&amp;url=https%3A%2F%2Fwww.nytimes.com%2F2006%2F01%2F25%2Fbusiness%2Fdisney-agrees-to-acquire-pixar-in-a-74-billion-deal.html&amp;usg=AOvVaw0C6tkOkUW7olQX_WHn3LTC\">acquired by Disney for $7.4 bln<\/a>.<\/p>\n<p>Disney itself is another great example of such a transformation. The company originally began as a media company, but over the years has transformed\u00a0into a company worth $153 bln today as a result of movies, television shows, theme parks, toys, video games and more.<\/p>\n<p>If Netflix can indeed transform its content into serious franchises, the current $145bln valuation could be seriously undervalued and the current share price could increase significantly as the transformation of its content is slowly realized.<\/p>\n<p>Of course, the road to get there\u00a0may be a long one, but with Netflix&#8217;s current stats, the company does not appear to be slowing down anytime soon.<\/p>\n<p>As always though, please do your own research before buying\/selling this share; the opinions above are only my personal views and should not be considered as advice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Netflix has risen 9% today on the back of some stunning numbers\u00a0from their first quarter release. Let&#8217;s take a look at some of the stats from the release Revenue grew 43% year over year for Q1, the fastest pace in their history, but primarily down to increases in the ASP of the service Operating margin [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":30,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"offerexpiration":[],"class_list":["post-273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-us-companies"],"_links":{"self":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts\/273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/comments?post=273"}],"version-history":[{"count":7,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts\/273\/revisions"}],"predecessor-version":[{"id":294,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts\/273\/revisions\/294"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/media\/30"}],"wp:attachment":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/media?parent=273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/categories?post=273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/tags?post=273"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/offerexpiration?post=273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}