NEW YORK – Even Frank Underwood would be impressed by the meteoric rise of Netflix.
Just one month after the service of streaming break the barrier of $ 500 per share, today celebrates a new milestone. Netflix exceeded the threshold of $ 600 for the first time in history Friday as Wall Street hard at the possibility that the company is close to decode and penetrate the attractive Chinese market.
Netflix has grown from a burning or “burning” a category that follows action. Such “incandescent” or “explosive” more accurately describes the performance of the company that produced ‘House of Cards’, the drama about the incredible political rise of Underwood.
Netflix shares rose on Friday nearly 5% to $ 614, starring an incredible rise 77% this year alone. That makes the action with the best performance in both the S & P 500 and the Nasdaq 100. not even have rivals Netflix takes you 29 percentage points ahead of its nearest competitor, the Dutch telecommunications company VimpelCom.
Why investors are renouncement to get a piece of Netflix? After stumbling late last year, the room movies and television programs on the internet seems to have regained its way.
“Globally there is a huge appetite for view programming in the form of marathon or binge content. At this time, Netflix dominates the business,” said Jeff Wlodarczak, an analyst at Pivotal Research Group that monitors the actions.
China, the cherry on the cake
That appetite could grow significantly if Netflix finds a way to gain ground in the growing online video market in China .
As reported by Bloomberg News , Netflix is in talks to partner with a Chinese company backed by the founder of Alibaba, Jack Ma. Not yet announced any agreement with that company, Name Wasu Media Holdings, and Western companies, on the other hand, have not finished deciphering well that market.
But take advantage of the explosive growth of China would be tremendous for Netflix. It would also be the icing on the cake. Wlodarczak said that currently no plans to add Netflix subscribers in China.
“Historically this has been a pretty tough nut to crack. But the association with Jack Ma maybe do much more realistic,” said Wlodarczak.
China could be the next engine of growth of the stock market valuation of Netflix, which soared to 37,000 million dollars on Friday. That means it’s now much more valuable than traditional media companies Viacom and CBS. And its market value is almost half that of 21st Century Fox, the film and television empire of Rupert Murdoch.
Is the action of Netflix too expensive?
However, rumors about China not silenced critics who argue that Netflix is overvalued.
Netflix currently trading at a huge multiple of 426 times projected earnings for this year. That is the price-earnings highest of any company in the S & amp ratio; P 500 (excluding Amazon.com), according to FactSet Research.
Will it $ 900?
Bulls Netflix say that focusing on multiples is wrong because the company is investing heavily to boost growth subscribers, thereby hurting profits. Wlodarczak made the comparison with people who felt that the shares of the company were expensive satellite television 15 years ago, forgetting that his heavy spending significant added value to the company.
The FBR Capital Markets last month caused a stir by saying that Netflix could reach $ 900 next year. ¿Far Fetched? Maybe not.
“If all goes well I do not think that’s exaggerated or crazy,” Wlodarczak said.
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