Netflix Shares Are Up, But Hasn't Satisfied All the Bears
*By Michael Teich*
Netflix's strong quarterly subscriber growth doesn't disguise the reality that Wall Street is grossly overvaluing the streaming giant, said Wedbush Securities analyst Michael Pachter.
"The Street is valuing the stock at more like $450 \[a share\], which implies a valuation of more like $200-$225 billion," Pachter said Wednesday in an interview on Cheddar. "That's crazy talk."
It's also nearly a 25 percent premium to where shares closed the day on Wednesday.
In order to justify a valuation that large for Netflix ($NFLX), Pachter said 200 million people ー 63 million more than currently subscribe ー would have to each pay about $100 more per year, or $8 more a month, on the service.
But adding that many users and hiking rates yet again will be tough amid intense competition from both tech and media rivals, he said.
He predicted it would take three years to hit those subscriber numbers.
As far as its monthly cost, he said Netflix can "probably get to $18-20 without competition."
"But there is competition. Competition comes from Amazon ($AMZN) at $11 a month, Hulu at $11 a month, very likely Disney ($DIS) at $15."
Still after a big miss in user growth for the second quarter, Netflix seemed to quell investor concerns when it said it added nearly 7 million subscribers globally last quarter, handily topping the 5 million that the company forecast and the 5.18 million analysts estimated.
Shares initially rose more than 15 percent after its earnings report, but ended up a little more than 5 percent.
Wedbush Securities lifted its 12-month price target to $150 a share, up from $125. That's 60 percent lower than where the stock closed on Wednesday.
For full interview [click here](https://cheddar.com/videos/the-lonely-bear-case-for-netflix).
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
William Falcon, CEO and Founder of Lightning AI, discusses the ongoing feud between Elon Musk and Sam Altman, and how everyday people can use AI in their lives.
U.S. tariffs on steel and aluminum “will not go unanswered,” European Union chief Ursula von der Leyen vowed on Tuesday, adding that they will trigger toug
The Trump administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down the agency that was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal. Russell Vought is the newly installed director of the Office of Management and Budget. Vought directed the CFPB in a Saturday night email to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not yet effective, and to stop investigative work and not begin any new investigations. The agency has been a target of conservatives since President Barack Obama created it following the 2007-2008 financial crisis.
Jeff Benedict, author of 'The Dynasty,' weighs in on the Kansas City Chiefs being the next big dynasty, who he thinks will win Super Bowl LIX and more. Watch!
