A Big Upgrade for Netflix
By
Dave Mock
March 20, 2008
|
Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we examine some of these picks -- and the track record of the firm behind them -- so individuals can make better investing decisions.
In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 89,000 investors -- many of whom actually demonstrate better investing insight than published analysts.
In the case of Netflix (Nasdaq: NFLX), enough CAPS investors have recently turned bullish on the stock to upgrade it from a meager two-star rank to a more respectable three stars. To get an inkling of what's behind the rash of optimism, we can tap CAPS' various resources for answers.
Netflix hit a roomful of bears with a one-two punch recently. First, the company's recent earnings removed some doubts that it could hold its own against competing services from Amazon.com (Nasdaq: AMZN) and Blockbuster (NYSE: BBI), racking up higher-than-expected revenue and earnings. Then the online movie-rental pioneer punched up higher subscriber guidance for 2008, even in the face of Apple's (Nasdaq: AAPL) new presence in the online video-rental game.
Several CAPS investors point to the move to high-definition movie formats like Sony's (NYSE: SNE) Blu-Ray as a big plus for Netflix. Since delivering this bandwidth-gobbling content over the Internet with good quality is neither practical nor economical today, Netflix's physical disc delivery will win out in the movie-experience department.
And while some voice concerns about the overall economy crimping consumers' willingness to rent more movies, others suggest that Netflix is a great bear-market play, since it serves as an alternative to pricier entertainment options. Subscription-based music services like XM (Nasdaq: XMSR) or Sirius (Nasdaq: SIRI) have free alternatives tempting consumers to close their purse strings -- not so with movie rentals.
To see what the very best CAPS analysts are saying now about Neflix -- as well as other winning stocks they're picking -- head over to CAPS and have a look. CAPS' community research and resources are totally free, unlike analyst opinions reserved only for paying clients.
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