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Netflix is now worth more than $100B

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Re: Netflix is now worth more than $100B

#121

Post by bsbechtel »

eldavido wrote: post #42
anilshanbhag wrote: post #19

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are…

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

Printing money for the past decade and giving it to large banks will have that effect. It's the same as giving $100 to every person at the market and then wondering why an Apple costs $100.50. The large investment banks are consumers of public equities.

Re: Netflix is now worth more than $100B

#122

Post by vonmoltke »

adamclayman wrote: post #70
aphextron wrote: post #62

Earlier quoted context omitted.

>Cryptocurrencies and ICOs. What value is being created here, exactly? There's plenty of idealistic notions being thrown around, but I've yet to see a single, real, useful product or service materialize >Applied neural networks. Same. >Automation. This is way too broad to be invested in. Of course the world is automating at a greater rate, but is this a cause for growth? Will automated factories produce more goods fo…

> Again, how is this growth? People will simply replace their existing cars at a known rate with electric cars as they become available/affordable Since driverless vehicles and fleets are arriving roughly concurrent to electric vehicles, they're actually more likely to _reduce_ the volume of cars produced, after accounting for any increased, accelerated "fleet churn" buyers exert via aggregate demand to reach a faste…

> Since driverless vehicles and fleets are arriving roughly concurrent

I have said multiple times, and did sign again, that I do not believe driverless vehicles will automatically lead mass adoption of fleet/on-demand vehicles. I don't think they will be as much of a savings over human-piloted vehicles as the optimists think.

Re: Netflix is now worth more than $100B

#123

Post by brucephillips »

mobilefriendly wrote: post #118
edpichler wrote: post #107

I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P/E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep. For whom that does not understand company ratios, a P/E ratio 230.24 is meaning that you need 230 years of profits to return to you the price…

This is nonsense. P/E is a measure of earnings against the price of one share. A high P/E does show that current earnings are small (or negative) in relation to share price, but there's no time component inherent in P/E.

There absolutely is. For a company to be valuable, it must return more profit to shareholders than they put in. The P/E ratio indicates how long it will take for this to happen.

Re: Netflix is now worth more than $100B

#124

Post by psergeant »

ebbv wrote: post #2

Can we infer from this that at the end of Q3 they had ~25 million subscribers? I am not planning to cancel Netflix but I am frustrated at how terrible most of the content is, and how hard it is to find anything with the current interface. I hope they're rethinking their UX and reconsidering their current approach of "License a bunch of really cheap awful content to make it seem like there's a lot of stuff to watch."

117m apparently

http://www.bbc.com/news/business-42779953

Re: Netflix is now worth more than $100B

#125

Post by brucephillips »

Spooky23 wrote: post #83
rajacombinator wrote: post #81

Finding Netflix fairly frustrating these days. Despite their runaway success they haven’t really done anything to change the Hollywood model. 99.9% crap with a sprinkle of watchable content. And despite the hoards of engineers and machine learning wizards they employ, discovery and interface has regressed in their product. Only reason I haven’t canceled yet is avoiding the hassle of going full torrent/YouTube.

It is amazing to me that they offered a superior interface by any measure back in the DVD days. The AppleTV interface for Netflix is a disgrace. I don’t understand how they have all of these brilliant engineers, yet make an interface worse than what Spectrum provides.

What interface do you want?

Re: Netflix is now worth more than $100B

#126

Post by zhjansbnas »

joshuaheard wrote: post #95
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

Real estate is doing well. It's still coming on strong after the '08 ditch. Interest rates are low and demand is still strong. When the stock market tops out, people will take their money out and buy real estate causing another rise. Eventually it will fall again. It seems that there is an 8-10 year market cycle, so it should be topping out soon. A rise in interest rates will be the leading indicator.

>When the stock market tops out, people will take their money out and buy real estate causing another rise.

If I understand correctly, you are saying that market sentiment that the stock market has reached its peak will result is real estate prices increasing. That’s a very optimistic take. When market sentiment thinks the peak has been reached, people start selling and you get a crash. Everyone can’t sell at the top.

I don’t think most people buy homes based on a guess of the stock market cycle. I think a more realistic model is: people sell stock and buy a house when it makes sense for their life and they can qualify. They take money out of the stock market (often a 401k) for the down payment and use it to meet reserve requirements. If the market crashes, people won’t be able to afford as much house and prices will drop.

If the stock market keeps going up, that will continue to be one of the factors supporting home prices.

Re: Netflix is now worth more than $100B

#127

Post by edpichler »

brown9-2 wrote: post #109
edpichler wrote: post #107

I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P/E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep. For whom that does not understand company ratios, a P/E ratio 230.24 is meaning that you need 230 years of profits to return to you the price…

If netflix doesn’t pay a dividend, does a P/E analysis still make any sense?

For sure, dividends donesn't mean nothing here. If a company is profitable and don't pay dividends to shareholders, they need to do something with the money that are accumulating, and they will invest on the company (new machines, products, services, etc. all accordingly with the company strategy), and if the company grows with this investments, the stock price will follows it.

Re: Netflix is now worth more than $100B

#128

Post by edpichler »

brucephillips wrote: post #119
brown9-2 wrote: post #109

Earlier quoted context omitted.

If netflix doesn’t pay a dividend, does a P/E analysis still make any sense?

Yes. Any public company must ultimately pay a dividend to be valuable. Edit: All of my responders are ignoring my use of "ultimately". A company can certainly invest in growth, but growth only matters if the company eventually returns money to shareholders, and the only way to do that is a dividend.

No, as I explained up here. It can use the money to grow.

Re: Netflix is now worth more than $100B

#129

Post by jedberg »

joering2 wrote: post #50

How do they make money?? I mean - seriously? And how will they stand up now that NN is gone and any company/website using much more traffic will be force to pay more? Please help me with the math -- at any given day, me, my wife and 2 kids are streaming netflix on multiple devices in HD; most likely pulling tens of gigabytes of data per day. How is that all covered under $10.99 per month?? and on the top - they make…

Delivery of video bits costs next to nothing compared to the content. Netflix will spend 8 billion on content next year. They won't come within even an order of magnitude of that on infrastructure.

Re: Netflix is now worth more than $100B

#130

Post by edpichler »

bulldoa wrote: post #111
edpichler wrote: post #107

I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P/E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep. For whom that does not understand company ratios, a P/E ratio 230.24 is meaning that you need 230 years of profits to return to you the price…

What does this mean for amazon (currently pe ratio of 300+)

I wouldn't put my money there. There is a lot of better choices with more return of investment. But, it's my money, you can do whatever you want with yours.
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