Netflix, Inc. (NASDAQ:NFLX)

CAPS Rating: 2 out of 5

Netflix delivers its comprehensive library of movies and TV shows online and through the mail in their ubiquitous red envelopes.

Recs

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Player Avatar pencils2 (99.85) Submitted: 9/6/2006 4:53:23 PM : Outperform Start Price: $27.16 NFLX Score: +148.20

Netflix is a very well-run business, a leading and innovating company, and they really have no serious competition (Blockbuster poses a short-term threat, but the company cannot figure out how to become profitable, and they won't shut down their stores, so I don't see them being a serious threat in five years). Add in the excellent financials, and a long-term winner is here. The worries about VOD are overdone, as always. Let's keep watching movies on a TV, shall we? VOD may be something larger in 10 years or so, but if Netflix needs to enter the market, they certainly will. Right now they don't need to, and management is smart enough to know that. Believe me, management will know the right time to enter new markets. Why? Because Netflix understands the DVD market more than any other business out there, and how to be profitable with it.

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