Over the next couple of weeks, analysts John Reeves and David Meier will be reviewing their real-money, 10-Bagger Portfolio. In this video, they take a closer look at Netflix.
Netflix is at a crossroads right now. It seems to be make-or-break time for the company, as it transitions from its DVD-by-mail business to streaming. John and David think the company will be successful in the end. It’s currently battling for streaming supremacy with Amazon.com, Hulu, and News Corp.'s BSkyB over in Europe. It’s a race for content and members across the globe. Netflix continues to make good progress, but it’s not easy -- or cheap.
One advantage Netflix has to exploit is its large viewing base. It knows what and how these customers watch content. That’s a big plus in negotiations for content. There’s also plenty of chatter about its content liabilities. So the key is to make sure that Netflix generates enough revenue to cover those and future costs. Management will use its customer data to make that happen as the company grows. All things considered, John and David are quite bullish on the company.
Netflix is no longer the darling of Wall Street it once was. But with a potential 600 million customers around the world, could it soar high again? Check out our premium report for both the bull and bear cases on Netflix. Just click here to start.