Netflix (NASDAQ: NFLX ) bull Whitney Tilson believes the Internet streaming giant could be undervalued by a huge factor if you think about it in terms of the world of cable companies, where competitors trade at $1,000 per subscriber. At current levels, Netflix trades at about $440 per subscriber, inviting the possibility for more upside to come if investors follow this logic. However, to compare Netflix to competitors in this way may not be a sensible approach. In this video, Fool contributor Steve Heller weighs in on the issue and why he thinks that Netflix probably shouldn't be valued this way.
The tumultuous performance of Netflix shares since the summer of 2011 has caused headaches for many devoted shareholders. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.