On September 6th just after 11 a.m, T-Mobile (TMUS:NYSE) posted on their blog that they will begin offering T-Mobile ONE family accounts a free standard Netflix subscription. The offer begins tomorrow (September 12th). No end date to this offer was provided. These plans typically cost $9.99 per month. Post the announcement, Netflix’s stock closed at $179.25, 2.3% above its opening price. Netflix Made this Move Because they were on Pace to Miss Q3 Guidance – According to our forecast model, Q3 2017 was pacing towards missing Q3 net subscriber addition guidance. Recall Ozark did not gain material traction despite Netflix’s […]
Target Price Update
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Based on T-Mobile’s announcement of Mobile ONE family plans now coming with a free Netflix subscription starting on September 12th, we are closing our Q3 Stock Call. This stock call estimated that Netflix’s net subscriber additions will miss its Q3 guidance of 4.4 million. With this announcement, it now appears Netflix can beat its guidance. We will provide an update on our views in the coming days. Important Disclosures and Disclaimer This publication is produced by Perspectec Inc. This publication and the contents hereof are intended for information purposes only, and may be subject to change without further notice. Any use, disclosure, distribution, […]
A volatile few months – The first half of Q3 2017 has been volatile for Netflix’s (NFLX:NASDAQ) stock price. Starting in July with our initiation at $146, NFLX jumped to $189 following a stronger than expected Q2 net subscriber additions before settling around $168 today. Also driven by news of Disney, Facebook and Apple entering the over-the-top (OTT) content market, Q3’s annualized volatility of 46% compares to a 29.5% annual volatility that Netflix has seen year-to-date. Netflix might fall short of the guided 4.4 million net adds – After updating our regression model for Q2 data, we estimate that a […]
Our ultimate goal with this survey is getting an up to date International churn rate for Netflix’s users, which can be used to determine their customer lifetime value (CLTV). This is the key unreported metric in their SaaS valuation, which appears to be how NFLX trades. CLTV along with the company’s total market opportunity are the key outstanding questions investors appear to have concerning the future stock price. More specifically the surveys are determining: a Penetration rate – The percentage of users who have or have had a Netflix subscription over the last 12 months. The market potential is best […]