Deep Dive: Here’s the case for buying Netflix’s stock now
Netflix Inc. has become a value stock — a bargain, according to Charles Lemonides, chief investment officer at ValueWorks in New York.
The Netflix value case This chart shows the movement of forward price-to-earnings ratios, based on consensus earnings estimates for rolling 12-month periods, over the past five years for Netflix and the benchmark S&P 500 Index SPX, +1.89% : Lemonides said Netflix will have an easy time growing revenue and earnings in part because of the potential to convert some shared accounts to paying accounts. In its first-quarter earnings press release, the company said that in addition to the 220 million households paying monthly subscription fees, an estimated 100 million more households were using the service for free through account sharing.
Netflix chief operating and product officer Gregory Peters said the sharing viewers presented a “tremendous opportunity” because “they have everything they need to get to Netflix.” He pointed to what may be a customer-friendly way of capturing additional revenue by “asking our members to pay a bit more to share thePeter continued: “So if you’ve got a sister, let’s say, that’s living in a different city — you want to share Netflix with her, that’s great.
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