Netflix stock sells for $571 a share, well over 100
times what analysts expect the Company to earn next year – and over triple what
you could have bought it for two years ago.
The Company is valued at over $34 billion today, and some people believe
it will go much higher in the coming months.
There’s a reason for that nosebleed-high valuation.
Netflix is revolutionizing the way we watch television. It is run by a bona fide visionary, Reed Hastings, and
it is growing by leaps and bounds, especially overseas. Every hour I stream a
movie or TV series on Netflix is an hour I do not watch conventional TV – and
on many evenings I don’t watch cable TV or the networks at all. These are the evenings I settle back for a
good movie like Shirley Valentine or The First Position or Quartet or an
episode of two of a TV series, courtesy of Netflix.
The old guard is aware of what’s happening. A few days
ago Verizon announced that it will soon unbundle channels for its FIOS
customers. Comcast and Time-Warner
Cable, which have been milking their bundles for years, see the writing on the
wall. And there will be more revolutionaries to come, as companies like Amazon
and Apple are not likely to let Netflix have the disruptive technology without
competition.
Still, first movers have an edge, and Netflix is
running fast. The Company’s catalog of movies and in-house miniseries is growing
fast, and I marvel at how much Netflix’s “content” has grown in quantity and
quality.
