Back of the envelope valuations presented to justify the valuation require massive subscription growth (typically 50% over next 5 years) as well as a big increase in margins (op margin from 5% to 30%+).
Problem is you cant have both.
These forecasts seem incredibly optimistic for a streaming service.
There are plenty of competitors could make life difficult for Netflix.
Content could provide something resembling a defendable moat but if you want global expansion you will have to provide for local tastes and languages thereby increasing costs significantly.
Am I missing something?
This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research.
Submitted January 25, 2018 at 03:45PM by InterestingNews1 http://ift.tt/2DCLElQ
