NFLX - Embedded Expectations Analysis - 2020 07 29
Netflix, Inc. (NFLX:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 48.1x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about their growth outlook, churn, and their advertising strategySpecifically, management may be concerned about their ability to generate an additional 200 million subscribers and about the efficiency of advertising through the Netflix platform, and they may be downplaying concerns about churn. Additionally, management may lack confidence in their long-term growth prospects and in the sustainability of the coronavirus-driven pull-forward in subscriber growth. Furthermore, they may lack confidence in the sustainability of lower marketing spend and in the growth potential of deals with MVPDs in new territories
Netflix is engaged in subscription streaming entertainment service including TV series, documentaries and feature films across a variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, without commercials. Additionally, several members in the United States subscribe to the company's DVD-by-mail service. The company improves its streaming content with a focus on a programming mix of content. The company's members can download a selection of titles for offline viewing. The company operates its business as a global operating segment.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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