Netflix, Inc. (NFLX)

WickedSmaht (80.32) Submitted: 10/13/2006 11:07:51 AM : Start Price: $24.02 NFLX Score: +160.99

Forget about the Blockbuster threat (they're too busy going broke to mount a sustained attack over the long term, and even if they survive, the market is expanding faster than they are).

Forget about VOD (it's out there, but how many people other than you and maybe your geeky cubicle neighbor are going to use it in the next three years?).

Forget, for a few minutes, about the closely watched churn and SAC numbers (they're important, but, like same-store sales at Starbucks, they're not the whole picture).

OK, forgot all that? Great. Now, remember this:

- NFLX pioneered the DVD-by-mail market when everyone else was still waiting in line at Blockbuster

- NFLX has consistently shown its wisdom in the use of technology to make the rental experience better, more efficient, and more relevant to each individual subscriber.

- NFLX has responded quickly and aggressively to every threat to its market dominance, making hard decisions in the short term to assure that it wins in the long term.

- NFLX is making money even as it continues to invest in expanding the market for DVD rentals.

- The DVD rental market is still expanding rapidly, and the DVD-by-mail market has yet to catch up to it.

Like a six-year-old trying on his Bar Mitzvah suit, NFLX still has plenty of room to grow. And if history is any guide, then when the next *viable* opportunity comes along NFLX will be ready to pounce on it as well.