Why Netflix Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, movie rental service Netflix (NASDAQ: NFLX  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Netflix and see what CAPS investors are saying about the stock right now.

Netflix facts

Headquarters (founded)

Los Gatos, Calif. (1997)

Market Cap

$9.0 billion

Industry

Internet retail

Trailing-12-Month Revenue

$3.6 billion

Management

Founder/Chairman/CEO Reed Hastings

CFO David Wells

Return on Equity (average, past 3 years)

38.9%

Cash/Debt

$748.1 million / $400.0 million

Competitors

Apple

Comcast

Amazon

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 19% of the 9,637 members who have rated Netflix believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star miclane05, tapped the stock's recent surge as particularly unsustainable:

[Netflix] might succeed in fending off hula, [C]omcast, and others, ink some long term content deals like the one with [D]isney, and be successful, but ... this stock has gotten way ahead of itself. This is not a high growth company and, at this P/E (or PEG) anything less than a grand slam will look like a loss. At this price, anything but the smallest position in a real-money portfolio is a pure gamble.

Of course, this short pitch doesn't even come close to telling the entire story of Netflix. You're in luck, though. The Fool's brand new premium report on Netflix tells all sides of the story for one of the most compelling tech companies in the world. You can grab your copy now, which comes with free updates for 12 months, by just clicking here.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2222541, ~/Articles/ArticleHandler.aspx, 4/23/2014 4:35:15 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement