Netflix, Inc. (NFLX)

boiseidfool (22.48) Submitted: 4/27/07 2:15 PM : Start Price: $22.17 NFLX Score: 50.97

Netflix provides online movie rental subscription services in the United States and has about 6.3 million subscribers. A recent online poll of 830 people who visited the Idaho Statesman website on March 27, 2007, revealed that most (31%) answered Netflix to the question, “Where do you rent movies?” Only 2% replied they rented from Blockbuster’s Online, while the remaining 67% reported they rented from a brick-and-mortar video stores. (Only 11% identified the video store as Blockbuster.) Netflix’s revenues and earnings per share are up more than 36% in the company's most recent published filing. Of the 68.7 million shares outstanding, 5.5% are owned by management and other insiders, but almost 200 institutional investors own about 80% of the shares. Netflix’s intrinsic value per share is $14.99, but it currently sells in the low $20 range. They do not currently pay a dividend and have a high P/E ratio of 28.5. Its 5-year revenue is at 62% while the industry is at less than 6%. Ten of 12 analysts who follow the stock make strong buy, buy or hold recommendations, while the other two suggest selling it. I concur with most of the analysts and believe the stock will outperform the S&P 500 over the next several years, but I disagree otherwise; I don’t think I’ll buy stock again until the P/E ratio falls or the stock nears the 52-week low.

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