Netflix Inc. (NFLX)

The competition has never been greater. Content can be created cheaper and easier thanks to AI tools. NFLX trades at 18x PE vs. the market's 20x, but this discount should be wider. NFLX needs new content; it doesn't have a library like Disney.

He bought more on today's dip. Likes it because: 1) they're past the Warners deal/distraction; 2) they've increase prices the last two years, paying paid subscribers by 40-50 million. NFLX has pricing power. It trades at a 40-50% discount from recent highs. It's not a semi company up 80% in a month, but a quality company that acts like a utility at a cheap price compared to a year ago.

It was in an uptrend, then broke a low of $90. Is making lower lows and lower highs. The trend is definitely down. The chart is not basing, not finding bottom, so can't buy it until it bounces.

Used to be growth stock and is now a value stock. There's a quiet quitting of subscriptions, losing users to user-generated content in TikTok and YouTube while long-form content is dropping. Yes, there are turning to sports and live TV. NFLX is now a contrarian buy. They have levers to pull.

Downturn really started with bid for WBD, and investors got nervous. Earnings forecast to grow 20-25% over next couple of years. Pretty solid operating results, yet stock's challenged. Still a leader, still likes it. Need to be patient.

On the chart, interesting that it's right at the 200-week MA, which tends to be a really solid support level for high-quality businesses. Could be at the point where stock takes off.

He thinks Netflix will take a run at NBC-Universal and the market will love it. This would be a better deal than the Warners one.

The one-year chart looks terrible, but shares are back to where they were before they walked away from the Warner deal. This is a great time to get in before their next growth catalyst.

Down here, it's too cheap to sell, so let's wait for the quarter and see what happens.

New fears that it's missing the boat and needs to look for another asset. Missed on American guidance because it was front-end-loading content. Massive scale. Margins actually expanded last quarter from 29.5% to 31.5%. More subscribers, more ads (and revenue), more countries, more NFL. 

Secular growth, market leadership, economic buoyancy. Good quality compounder. Growing 15%, trades at 15x. If you're scared to buy it today, sell puts. No dividend.

It is largely mature in its North American subscriber base so growth is slow and that is their high margin area. The international base has growth but it is low margin. It is trading at a pretty high multiple of 40X earnings. It also has competition from elsewhere. People are moving more into shorts and this benefits YouTube which has twice the user base size as Netflix.

Recently disappointing. Price now below 200-day MA, which has started to roll over. It's still the leader. Going back to its roots of creating content, and now getting into live sports. Trades at 24.5x forward PE, and ~23% growth. Valuation makes a lot of sense, but technical structure a bit soft. His team is evaluating.

Still looking at this one. Lots of moving parts. Likes the business, great moat. Multiple right now is rich. His team likes growth but needs a margin of safety, and they're still assessing prospects of a reasonable rate of return. First-mover advantage has given way to competition.

Clear global leader in high-quality video content streaming. Pricing power in the face of competition, best-in-class customer retention. He expects revenue to grow at double-digit pace, margins should expand. 

Aggressive investment in movies and shows, but increasingly podcasts and live events. Capitalizing on digital ads. Earnings should grow at 22% compound pace for next 3 years. Trades ~22x PE, good tradeoff between value and growth. Share buybacks. No dividend.

Can't see them returning to growth in 2020-4 given competition. Also, how we consume content is changing. Returns are poor. Is not attractive at near-30x PE.

(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.