October 22, 2013
The demand for content is rising as providers seek to deliver popular mix of media to the varied portals i.e. phone, pads, laptops, computers and anyway to gain a strong WiFi connection. No matter your age media content from text, audio and digital is being delivered to users wrapped in accessibility, lower cost with an added value. Netflix is under review as topping the charts and under analysis for investment while being positioned for big equity and share price valuation. The money guys read the tea leaves and “Analysts raise Netflix targets but ask if shares now too high” as the news hits they have more viewers than HBO.
Reuters offers the “strong subscriber gains by Netflix Inc prompted analysts to sharply raise price targets on the stock, even as some worried that the shares are getting expensive as the online online video company faces bigger bills for original programs. Netflix shares were set to open 9 percent higher at around $387, having more than doubled in value in the last six months. It is the biggest gainer in the S&P 500 index this year.”
“At least 12 brokerages raised their price targets on Netflix’s shares by as much as $200, yet most of the price targets are still below the current share price. Netflix has invested heavily in original series such as political satire “House of Cards” and critically acclaimed prison drama “Orange is the New Black”.”
As company evolvement is good for business. The boom in Netflix through its original programming and accessible non-commercial content makes for good business at $7.99 a month. The value to access online content, as well as through appliances like Apple TV, Roku, Netgear and stand alone plug in’s is becoming a better buy than cable where the costs are soaring and the value is diminishing.
“Netflix added 1.3 million customers to its U.S. streaming business during the September quarter and said on Monday it expects to end the year with between 32.7 million and 33.5 million users.”
In looking at the increase in cost and diminishing value of cable is the economic indicator for failure. Cable continues to deliver programming one week at a time constrained by major broadcast networks that continue to operate as in the 1950’s.
The boom of Netflix is a viable alternative with sustainable footprint for growth. Once users understand the simplest formula for WiFi access that is extracted from the cable platform content providers like a Netflix will soar farther.
The challenge is to sustain momentum but sometimes stability can be a win as other prominents such as, Coke, McDonald’s, MIT and Harvard where sustainability is maintained through quality, strong captive markets and breading new customers into the pipeline despite technology and economic change.
The opportunity is understanding the ecosystem and the appetites for content wrapped in affordability and accessibility as the sustainable solution. Netflix is probably over valued but worthy of the long haul.
Related articles on Netflix
- Netflix earnings jump as it surpasses HBO in U.S. subscribers (latimes.com)
- Netflix has no shortage of catalysts (business.financialpost.com)
- Netflix Poised to Pass HBO in Paid U.S. Subscribers – Bloomberg (bloomberg.com)
- Netflix Quadruples Its Earnings, Stock Soars (dailyfinance.com)