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Wednesday, July 6, 2011
Netflix (NASDAQ: NFLX) Merriman degradation deadlock in the range of short-term pressures and limited upside targets
Netflix ran to a record high yesterday on news of expansion in Latin America and the Caribbean. As such, they confirmed what had been expected since early this year - the most likely region for international expansion would be Latin America. This is believed to be a very attractive market of broadband subscribers with the expansion of wealth due to less competition in Europe or the United Kingdom. Netflix streams offer its subscription plan only in 43 countries in Latin America and the Caribbean during 2H11.
Merriman believes there is more than 40M broadband users throughout Latin America and the Caribbean, given the penetration of broadband subscribers reached 4% and in Canada during the first 9 months, see 10 fee. 5% penetration in new areas during the first year. This would 1.9-3. 8 million subscribers and $ 180-360M in revenue annually (assuming $ 8.00/month subscription price).
Netflix seen entering a period of restricted operating margins. Although the Q1 conference management increased its expected losses, 2H11 from the international launch of this year to U.S. $ 50-70M 50 million dollars, the analyst believes that the projection of A / A decreased operating margins at least for next year could begin to negatively impact investor perceptions of trends in growth and valuation multiples.
International company may see increased spending management guidance has increased the operating range with a desire announced probable loss that blocking key contents to get a head start on potential competition would not be surprising that the management of increased orientation loss operational again. While this decision would be positive for Netflix prospects of long-term growth, the analyst believes could cause a short-term shock to current earnings estimates and valuation multiple.
Current valuation range of $ 300 Merriman 330 is based on a P / E multiple of 50x FY12 EPS 45-estimate (or a proportion of 1.0 x PEG). After the increase of 89% stocks, as their update NFLX are now less than 10% upside potential valuation range for the target. Updating analysts based on the prospects for international expansion, he has played.
The analyst recommended RTCM exchange as a game of the ongoing transition in the physical home video segment, along with a wildcard in the announcement expected around Redbox's digital strategy and partner. Has recently increased EBITDA estimates above guidance and consensus after a thourough analysis of 2011 potential DVD rental and see the quarter of revenue / EPS rising short-term. Using a very conservative estimate of 5.5 6.0x FY12 EBITDA multiple actions he believes RTCM can reach a broad assessment of the $ 72-79 (27-40% upside).
Notablecalls: Chances are you will not believe but Merriman can actually move the name. Merriman was the High Street of $ 300 - $ 330 valuation range when the action was in the low $ 200.
What I like about this call is not too aggressive. The analyst is right, but his is far more doubts about the head. Year on year comparison difficult with high valuation is not the best combination for a mo-mo action.
tags:nbg, εθνικη τραπεζα, météomédia, national lottery, national lottery euromillions
Netflix ran to a record high yesterday on news of expansion in Latin America and the Caribbean. As such, they confirmed what had been expected since early this year - the most likely region for international expansion would be Latin America. This is believed to be a very attractive market of broadband subscribers with the expansion of wealth due to less competition in Europe or the United Kingdom. Netflix streams offer its subscription plan only in 43 countries in Latin America and the Caribbean during 2H11.
Merriman believes there is more than 40M broadband users throughout Latin America and the Caribbean, given the penetration of broadband subscribers reached 4% and in Canada during the first 9 months, see 10 fee. 5% penetration in new areas during the first year. This would 1.9-3. 8 million subscribers and $ 180-360M in revenue annually (assuming $ 8.00/month subscription price).
Netflix seen entering a period of restricted operating margins. Although the Q1 conference management increased its expected losses, 2H11 from the international launch of this year to U.S. $ 50-70M 50 million dollars, the analyst believes that the projection of A / A decreased operating margins at least for next year could begin to negatively impact investor perceptions of trends in growth and valuation multiples.
International company may see increased spending management guidance has increased the operating range with a desire announced probable loss that blocking key contents to get a head start on potential competition would not be surprising that the management of increased orientation loss operational again. While this decision would be positive for Netflix prospects of long-term growth, the analyst believes could cause a short-term shock to current earnings estimates and valuation multiple.
Current valuation range of $ 300 Merriman 330 is based on a P / E multiple of 50x FY12 EPS 45-estimate (or a proportion of 1.0 x PEG). After the increase of 89% stocks, as their update NFLX are now less than 10% upside potential valuation range for the target. Updating analysts based on the prospects for international expansion, he has played.
The analyst recommended RTCM exchange as a game of the ongoing transition in the physical home video segment, along with a wildcard in the announcement expected around Redbox's digital strategy and partner. Has recently increased EBITDA estimates above guidance and consensus after a thourough analysis of 2011 potential DVD rental and see the quarter of revenue / EPS rising short-term. Using a very conservative estimate of 5.5 6.0x FY12 EBITDA multiple actions he believes RTCM can reach a broad assessment of the $ 72-79 (27-40% upside).
Notablecalls: Chances are you will not believe but Merriman can actually move the name. Merriman was the High Street of $ 300 - $ 330 valuation range when the action was in the low $ 200.
What I like about this call is not too aggressive. The analyst is right, but his is far more doubts about the head. Year on year comparison difficult with high valuation is not the best combination for a mo-mo action.
tags:nbg, εθνικη τραπεζα, météomédia, national lottery, national lottery euromillions
Labels: Business
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