I have built a position in Netflix £NFLX for various reasons.
Mainly cheapest the stock has ever been
Clear reasons why it has dropped
Reasonably clear strategy as to how they are going to rectify things
high operating margins
cost control plans in place - cutting staff costs. Reducing content spend. Monetising password sharing
Will sub loss really be 2m in the 2nd Q?
Any views to the contrary?
Netflix now has a lot of competitors and lacks popular brand franchises that Disney for example has in spades. It needs to keep spending on new content and subscriber growth appears to have plateaued. Despite the SP drop the valuation is still nowhere near cheap.
If Netflix drops another 99% it will still be a company that makes no money.
Their new subscriber aquisition costs is something like $10000 per new user. They charge £6 a month!!!
in my opinion the P/B, P/S and P/E ratios are too high and does not qualify as a value stock … indeed this stock does not have a good Stockopedia Value Rank
