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).
While the U.S. may slowly be on the path to lowering inflation (and therefore interest rates), Europe has thoroughly trounced America, putting it on the path to lower rates by this summer.
April's release of the monthly Housing Starts and Building Permits reports by the Census Bureau provides crucial insights into the construction activity in the housing market. These reports are an economic indicator, shedding light on the current state of the housing market and its broader economic impact.
Caitlin Clark is heading to the Indiana Fever, the number one draft pick and the highest-scoring college basketball player of all time. And while she may not be getting millions from the WNBA, there's a few ways she'll net compensation for her generational talents.
Author of 'Clean Meat,' Paul Shapiro joins Cheddar to discuss how the cellular agricultural revolution helps lower rates of foodborne illness and greatly improves environmental sustainability. Plus, how his company The Better Meat Co. is bringing healthier food options to the table.
Recent headlines might make it sound like World War III is imminent, but when it comes to your finances, it's not the time to panic. The market is coming off its longest winning streak since 2011.
You may have noticed fewer new venture capital-backed startups (like Airbnb or Uber) lately. The market slowed to a crawl after 2021, but things are expected to take off again in 2025.
Corporate earnings season is underway, that time when companies share their billions in sales or double-digit profits. But the data shows even companies are struggling with high inflation and interest rates.
Boeing continues their terrifying trend of having their planes fall apart mid-flight, inflation — checks notes — is still up and the future of AI looks terrifying. Cheery!
Food waste – uneaten scraps or leftovers sent to landfills – is responsible for 10% of global emissions. Mill, a new product from the co-founder of Nest, thinks technology can play a role in eliminating it.
By the time the 2024 election is over, be prepared to see some form of a recession – but this shouldn’t be as bad as what we experienced in 2020 or 2008.
