2-Star Stocks Poised to Plunge: Netflix?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, movie rental service Netflix (NAS: NFLX) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Netflix's business and see what CAPS investors are saying about the stock right now.
Netflixfacts
Headquarters (founded) | Los Gatos, Calif. (1997) |
Market Cap | $3.6 billion |
Industry | Internet retail |
Trailing-12-Month Revenue | $3.4 billion |
Management | Founder/Chairman/CEO Reed Hastings |
Return on Equity (average, past 3 years) | 58.3% |
Cash/Debt | $804.5 million / $400.0 million |
Competitors | Amazon.com |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 19% of the 9,528 members who have rated Netflix believe the stock will underperform the S&P 500 going forward.
A few months ago, one of those Fools, Becker2011, touched on the competitive headwinds working against Netflix:
In this game it is all about content, which boils down to who has more cash to buy it. Amazon ... signed a deal with Viacom adding Comedy Central and MTV to what they have to offer. As Amazon slowly enters this space [Netflix] is going to have more and more problems competing and retaining customers. Also, not to mention Coinstar's [Redbox] can't be helping either.
If you want market-topping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.
Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Netflix and Amazon.com. Motley Fool newsletter services have recommended buying shares of Amazon.com and Netflix. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
