There are three types of people those who watch
Netflix
Those who invest in Netflix and those who stay away as far as possible from Netflix. Which one should you be? Today we will
answer this question
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So they will talk about the necklace
Let me first answer your question to do watch the fixed investment
Vehicle is taken from edifice between investing in that base and watching that bits. Of course
it's messing that piece instead of just watching it because
it's another poor people who will watch Netflix will understand themselves so much Netflix is
Reliability if you're going to watch it
But now let's come to investing should you invest in that this owner?
Stay away from it net which is the larger substitution base video streaming service in the world with hundred and thirty nine million subscribers
Included 60 million of the United States. The company was founded in 1997 by Reed Hastings
We still the CEO of the company up to this day
It started with DVD renders and now since 2007
It has been focusing on the streaming service
Netflix has also been making its own content through natf its original and I think a mouthful but
can tell that the middle was house of God and
Personally, I watch house of cards. So it's not always that watching Netflix. Is it a happy thing?
You should know which with what you are watching and how much lower can you should entertain yourself. Let's get back to business
first of all, subscribe don't forget to subscribe watching new subscribe now in 2016 that fix was made available in more than
190 countries
so now let's come to
That have a new segment of necklace. Let's see how Netflix actually makes money Netflix has free revenue segments
The first one is domestic streaming segment that is 52 percent of all revenues
The second one is international streaming segment. This is 44 percent of revenues
and the third one is domestic DVD segment focus all of the provi news so that this still works with
DVD rentals, but now they're both focused on the streaming and like I said,
most of the revenue is
the United States and that's because they need more money from a US customer than from a non-us customer and it is because of
Any price difference is because of customer acquisition
It is easier to get
customers in the United States in other countries for example in India
Had been difficult for the fix to get customers because Netflix doesn't provide
Indian shows Indian films and that's why they have to pay more in order for them to acquire customers
And of course, it's important to note that net. This is not available
In China one of the no chest if not the largest market available right now
So now let's come to the fundamentals the period show of Netflix right now is 115 and they have a practical book of 28
I know that this looks very expensive
But then it should be any craft stuff. So now let's have a look at the free cash flow
Negative free cash flow. Yes, that's a graph stock with negative cash flow
The debt to equity ratio is one four nine seven. The current ratio is one point six seven
The PG is one point five nine
So among all these fundamentals are only things that I am happy about in the current ratio, which is one point six seven
Which looks good, but they have a high debt to equity ratio
they have been putting a lot taking a lot of deaths and not upload anything to produce those contents and now
That's why they have a negative cash flow. They are saying that that
2019 is going to be their loss. Yeah that they are going to have a negative free cash flow. So, let's see
What's the future of Netflix reply if we look if we just look at the earnings of Netflix over the last seven years from?
2011 and for what? We will see that
The earnings have been growing at the very fast way and when the stock right that's why it's hard going
But I don't think they can keep this momentum forever. They will not be able to keep this moment
Because there will be some point whether they will reach the maximum possible
customers and the new customer that they will be claiming will not be that much and there will be only making money from the
existing customers and with the model the business model at Netflix has it's
Difficult for them to increase the number of the amount of money that they get from each customer
Because after had the same problem they cannot increase the number
I thought you said that they already have but they're moving to services
They are making is still making money from this existing client
But it's harder for this is because the only thing they do is streaming videos one way they of course trying to deal with that
Is with Netflix originals, but it costs a lot of money for them to make this end read
It's difficult to do how this is going to work
And now let's come to the competitors of Netflix because for such a long time like it has had zero competition
Nearly zero competition. That is the leading
company in video streaming interval
but now there are a lot of competitors coming especially Disney Disney has already said that
Soon they will not allow that to show their to show their content
So without the stay content, it means there's no mobile movies
There's no longer some with there's no Disney Channel. There's no ESPN
And Disney is starting its own video streaming service this year nibblers
and of course
We should know that this day by biodata first Century Fox
They become 60% order of Hulu which is the main competitor of me
Especially in the United States Hulu has about 20 million customers in the United States compared to 16 million
Customers for that piece. I know this doesn't look so big but if the contents of
Netflix will be limited. Of course
There will more and more customers
Going to and in that fix has increased its price while you have decreased the price of the subscription
So, how can I follow this?
It's because Hulu is a company which was created just to just to be able to compete with Netflix
It was great about all those big media companies such as Disney
21st Century Fox times Warner
AT&T all these companies the birth they decided to create a company to gain another big competitor funny faces Amazon with Amazon Prime
And also there's Apple and hearing this video streaming space in the coming years
So it will be harder and harder for knife is now to dominate but I think I will still be the leader
but it will be harder for them to come in it especially with this me because this is
The largest entertainment and media conglomerate in the world and they have a lot of resources
They have been important Disney in
2018 lost 1 billion u.s. Dollars just to complete with Netflix and the second lose 1 billion u.s
Or not because there's not that much for them
but that this the less than 1 billion Westeros in India, so you understand the amount of resources that
Netflix has and even Amazon and Apple and all these big major conglomerates such as AT&T
Comcast this is important to compete with Netflix because they have the money and that things does not have the money and they fix it
Transmuted that the main competition is not the other major companies. It's mainly
YouTube which is online Google it is also for tonight all these gaming
all these video games because when people watch YouTube or they are playing video games
They are stay away from that fixed. It is all about much time and you can invent can Facebook as a
competitor for nerd face because when you're on social media watching videos on the Facebook or you're scrolling on Instagram
You're still away from benefits and you are stealing watching time wash time from the face
So of course all these things are competitors for Netflix so looking at all this I retail that
Mattress has a great business model. It has been working now and they are the leader in this video streaming
Sector, but they will be having competition coming big competitors
But looking at the prices now
It's very very expensive less top at a period of 115 a book prosper book of 28
It's very expensive. It's one of the most expensive stocks. I know and
The best time to buy the fix was in 2011 not now today
It's too late if I will put a price on of this where I will consider buying at least I will say at 70 US
Dollars, so you see I don't think Netflix before - 70 US dollars right now and in the near future
I will say that the recorded increase earnings
But the price is going to suffer
I don't think that the price can
Sustain such a huge pyramid if there is a gear market coming a recession coming they are going to suffer
you know the stock price of Netflix, so
why is it difficult for me to invest in a fix right now is because of the uncertainty of all the ways that
Probability is just probability is good in the certainty always good at probabilities the new law the future 5 leg next 5 years
next 7 years
How much will be that stock price of such company if I didn't have net fits in seven years?
I will say that net this is going to grow at a fast rate is going to be
For much more than 80 G's with it. So it looks like a good investment
But if you think in terms of probabilities, what is the probability that I am wrong in my calculation?
That is a huge variability and that's why I'm not ready to invest in Netflix right now
So let me know in the comments. What do you think about Netflix?
Do you feel it is still a good investment. Do you have a best man?
Thank you for watching this video
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