Is Netflix Stock a Buy? – Episode 1 – Is it a Buy!

Link to join StockHub free investing discord server: –~–

Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re doing episode 1 of a brand new series called is it a buy is it a buy where i break down one stock each week or each every other week and i decide if a stock is a buy it’s either i’m buying it or i would not buy the stock and today we are

Doing netflix netflix is a very first dock we are doing now for future reference how i will decide what stock i do the following week i will decide it by someone that puts something in the comments that is a particular stock so i will pick a random winner each week to decide which stock i break down so you guys need to leave a comment on which stock you want to see

Broken down say any stock out there you want as long as it’s not a penny stock or something like that if it’s a penny stock i’m not gonna break that down i’ll be honest but pick any type of real company put it down there and i may choose it i’ll choose one of them randomly every single week so go ahead and do that now and you have a chance of winning the grand prize

Which is me breaking down that stock next week let’s go ahead and get into netflix now on your screen now you should see a about us section now someone came to me and they said hey you know you should check out this netflix talk you know i think it’s a good one so i need to go check out this netflix no we’re gonna assume that i’ve never heard of netflix obviously i

Know netflix i’ve heard of them and whatnot but the we’re gonna act like i did never did so i need to go to the investor relations tab on netflix calm and then i need to look at the 10k form the annual report so i went and did that and now we’re in the about us section and we see netflix is a world’s leading internet television network with over 75 million members

In 190 countries so right off the bat here i know they’re a streaming service of shows and movies and all those kinds of things as you can read all in that first paragraph i know they’re in 109 country’s that’s quite a few and they have 75 million members that is quite a few so as we kind of go along here they talk about their strategy and whatnot yeah that all’s

Good now let’s go ahead and read that last paragraph there we continue to grow our streaming service both domestically and internationally we began our international expansion in canada in 2010 so they’ve only been expanding internationally for about six years so that’s what i take so far from this paragraph we launched our service globally with the exception of the

See also  Conditional Value at Risk and Stress Testing in Financial Risk Management

People’s republic of china in other territories where us companies are not allowed to operate so that’s a big thing now it’s a big thing for two ways that’s really sad they cannot get into that market yet because china is a huge market we’re talking about billion three people we’re talking roughly 600 million in the middle class and always expanding expanding fast

Growth that’s a huge market that they’re not in right now but it’s a potential opportunity in the future if they can get in the chinese market that’s huge but if they can then that limits their growth substantially it really does so let’s go on and now on your your screen there you should see a competition a competition section is always located in the annual report

And here it’s basically talking about the market for entertainment video is intensely competitive yes we know that subject to change you know internet video providers blah blah blah that’s all great as far as competitors i don’t see a lot of competitors for netflix i’ll be honest the old competitors were netflix we’re a blockbuster and hollywood video things like

That those all went out of business there aren’t a ton of streaming services out there they’re things like hulu which is a show type of streaming service then you can buy actual just movies on like say apple you know or google play or something like that there’s not a lot of competition for netflix there really have the market cornered they’re almost like a kind

Of a monopoly in the streaming service so as of right now i’m really liking netflix as a rate just judging off the business so far i’m really liking it so far they have a huge opportunity they’re almost like a monopoly in their space they’re dominating it they don’t have a lot of competition in my opinion so right now i’m liking it so far next on your page now we

Have there’s a category called like risk factors and enlist all types of risk factors for that company could face now this one i haven’t highlighted on this is a very important we would like we rely upon a number of partners to make our service available on their devices now what does that mean to me what that means is netflix has to be streamed through either a

Device of some kind an ipad an iphone an apple tv some type of google device android something netflix doesn’t have its own like you know device that you can actually watch it on its own tv or something you have to stream it through a device so this is big what if say apple wanted to get into netflix is business they said you know what netflix screw you we’re not

See also  Spiritleaf Stores opening all over Canada

Gonna have your app on any of our lists anymore you’re not gonna be featured we’re not gonna allow your app to show up on the app store anymore imagine how that would kill netflix is business overnight overnight it would also hurt apple because a lot of people are very loyal to netflix and they might go to be android users or something but i guarantee you it would

Hurt netflix a lot more than it hurt apple apple you know they’re so big and powerful and they’re so important to people that netflix is kind of like a back burner to them so i look at that and that is a risk if one of the big carriers or somebody dropped netflix from their service i you know that is it’s a big it’s a big factor out there let’s move on so now i’m

Done looking at the business so far i still really like it you know that does that is kind of a risk about somebody dropping them as a you know on their device or whatnot you know if apple said we’re not gonna have you on the app store or google that’s a risk but so far i really like the business because i don’t see that being realistic and whatnot so now we need

To start looking at finance so i decided i like this business so far let’s look at these financials on your screen we have the last five years up there let’s look at 2011 2011 they had 3.2 billion dollars in revenue all these numbers are in thousands by the way so it looks like it says 3.2 million dollars in revenue that’s actually 3.2 billion dollars in revenue

Revenue in 2011 now let’s go all the way over to 2015 they did 6.7 billion dollars in revenue so they over doubled their revenue in the last five years that’s dang impressive especially for a company of that size now now if we’re going to go down and look at the earnings per share oh boy this i do not like they were earning 61 cents a share in 2011 in 2011 they

Were earning 61 cents a share now in 2015 they have doubled the revenues over double the revenues in their earning 29 cents they’re earning less than half of profits than they used to be and they have doubled the revenues so this this is a real turnoff i’m not gonna throw it out yet i’m still undecided about this one but that is a big no-no in my opinion i do not

See also  6 Ways I Save Hundreds On Groceries With Zero Couponing

Like that whatsoever that’s ugly but let’s go on to the next slide so now what i want to look at i want to look at how big their market cap is i want to look at their pe now most market caps over a hundred billion i’m not really very interested in so if it was over a hundred billion i would probably say i’m not really into this one they have a forty-three billion

So that is what something i’m interested in it’s a small enough company that i would be interested in let’s look at that pe 319 319 this stocks done i’m not buying this stock at all this stock is darla i’m just gonna be honest with you guys 319 pe their earning over double the revenues they used to be profits are half of what they used to be i’m done with this

We’ll just look at the balance sheet for the fun of it just for the heck of it cash and cash equivalents in 2015 they are 1.8 and that’s good short-term investments of 500 million that’s fantastic that’s 2.3 billion there and unfortunately they have 2.3 billion in long-term debt and they had 2 billion in other liabilities this stock is not a buy for me it is not

My stock it’s not at my ally i hope everybody that’s invested in netflix has a great time and they make money but for me this is not the one this is not the one i would not rate this a buy i would not buy this with my own money no way no how that covers netflix for the day guys hopefully next week we can maybe get one that’s a buy but who knows it could be a lot

Of no no buys we’ll just have to see as time rolls on don’t forget in that comment section to leave a stock that you guys would like to see broken down and i’ll pick one lucky winner to break that down next week if you like this video give it a thumbs up if you haven’t subscribed you may want to talk ton about personal finance talk about stock market related things

Like today and i also talk about business and entrepreneurship thank you so much for watching guys and have a great day

Transcribed from video
Is Netflix Stock a Buy? – Episode 1 – Is it a Buy! By Financial Education

Scroll to top