The market is big on Netflix at the moment. In this video, however, Fool analyst Blake Bos offers three reasons to avoid this company. First, Netflix operates in a hypercompetitive market. Second, content costs will likely eat away at revenues. Third, Netflix trades at 100 times earnings and doesn't have the deep, wide moat or industry dominance that, say, Amazon does to justify that high a price. Further, Amazon has almost 10 times the free cash flow as Netflix and can easily throw its weight around in this market. Netflix, therefore, doesn't have the financial clout to directly compete with Amazon.
The relevant video segment can be found between 17:48 and 22:23.
Blake Bos and Isaac Pino, CPA have no positions in any stocks mentioned. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.