Brian KellyNetflix Inc.NFLXBUYSep 03, 2021

(Note the short timeframe.)  Popped up on WBD deal exit, and then fell on Q1's softer earnings outlook. Still a secular winner in streaming. Still attractive today.

Peak was during Covid. Streaming on other platforms is a real headwind. Good company and good delivery mechanism, but they need to boost content.

He has a core holding on either side of 3.5% -- he trims on the way up, buys back on the way down and writes options around it. Price for another (but smaller) M&A deal is ongoing. 

His 12-month price target is $116.33. Buy a third here ~$88, another third ~$84-85, and then ~$80.

It reports tomorrow. Every quarter is feast or famine. They announced a price increase. Subscription growth, who knows? The stock remains undervalued, is #1 in this industry and has more levers to pull, like live sports.

They report Thursday. It's a juggernaut. He gives them the benefit of the doubt to keep building and growing.

The advertising business is very good and they are cracking down on passwords. It has been beaten up because of its pursuit of Warner Brothers. It didn't go through so the stock has started recovering. It is revisiting and adding new content, and building out its sports contracts. He sees earning growth at 20%. 

Is starting to look at it after NFLX dropped its Warners bid. He likes their business, excellent. If it pulls back 10-20%, he's probably enter. Is still researching it.

She added more Netflix and is slowly adding to it. She only recently started buying it for the first time, because it was always too expensive in PE. They're not buying Warners, so their story is much simpler. There's 20% earnings growth, 12-14% revenue group as operating margins expand and resume buybacks. Trades at a not-cheap 29x forward vs. 35x historic. Is still well below highs.

They're pricing power has been confirmed many times. He likes it a lot.

They will stream MLB's opening night. He sold this before NFLX backed out of the Warners deal and shares jumped. He will get back into this. Live sports will attract more customers, efficiently. During the World Baseball Classic, NFLX streamed it and attracted 31 million viewers in Japan.

They will stream MLB's opening night. Anything under $100 is free money; he just added more. Only this and YouTube are the only entertainment companies worth owning. Is -3% this year, but +17% since they ended the Warners deal. NFLX should grow 10% or more annually, and should earn $5 per share by 2028. A 20-25x PE is justified. He targets $100-120.

Good job backing out of the deal to preserve balance sheet. Strong management. Mature industry. All we cared about 10 years ago were subscription rates. Now they have to see what else can produce revenue.

(10-for-1 stock split 17 Nov 2025)  Volatility all due to the chase for WBD, and now they get a $2.8B breakup fee. Market was concerned about this acquisition. Should recover, expects it to be the long-term leader.

Makes sense this bounced after it bowed out of the Warners bidding. Warners would have diluted a stronger company. Wouldn't buy it now. He sees long-term secular decline in streaming, because young people prefer YouTube, which is twice as big as Netflix. North American Netflix numbers are starting to fade, too.