Netflix shares have been on an unbelievable rollercoaster ride the last year and a half, and despite a lurch right after the company reported disappointing Q2 revenues in mid-July, are booming once again in August.
Shares are up 30% in the last two weeks, past $137, and are up almost 40% from their post-earnings lows in late July. Year to date, shares are up 160%, while Apple shares are up 20%, Google shares are down 20%, and the S&P 500 is roughly flat.
The bull case for Netflix is that its apps for devices like Apple’s iPad and Nintendo’s Wii will continue to drive new customer growth, that deals with pay-TV companies like Epix will continue to improve its streaming product, and that international expansion could be huge.
The bear case is that everyone is only going to compete harder with Netflix, including Apple, Google, Hulu, Redbox, the cable companies, etc.
Special mention: UBS analysts Brian Pitz and Brian Fitzgerald, who put a “SELL” rating on Netflix in May at $112, with a $90 price target; and the WSJ’s Martin Peers, who said in March 2009 that Netflix’s “stock-price bubble may be close to bursting” — in the $40s.
Photo: Yahoo Finance
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