Here are 5 Reasons to Buy Netflix (NFLX) On the Starz Weakness - Goldman Sachs
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Price: $80.14 -0.1%
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
57 Buy, 26 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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One of the biggest Netflix (Nasdaq: NFLX) bulls has now weighed-in following news after the close that Starz has ended contract negotiations and will pull their content in February.
Simply put, Goldman Sachs' Ingrid Chung sees the Starz controversy as a buying opportunity.
Chung cited five reasons:
1. Starz content accounted for a small and declining percentage of viewership (8%, going to 5-6%)
2. subscriber growth has not been negatively impacted by losing Sony content 2 months ago
3. Though not highly likely, there is the possibility that Starz could come back to the negotiating table
4. Netflix now has 6 months to find content
5. The lowered valuation as very compelling compared to other fast growing, disruptive Internet companies.
Specifically on valuation, Chung notes that at $210 shares would trade at a 2012E EV/sales of 2.2X, a discount to LinkedIn (Nasdaq: LNKD) at 10.3x, Pandora (NYSE: P) at 7.3x, OpenTable (Nasdaq: OPEN) at 7.0x, and Priceline (Nasdaq: PCLN) AT 4.4X.
Simply put, Goldman Sachs' Ingrid Chung sees the Starz controversy as a buying opportunity.
Chung cited five reasons:
1. Starz content accounted for a small and declining percentage of viewership (8%, going to 5-6%)
2. subscriber growth has not been negatively impacted by losing Sony content 2 months ago
3. Though not highly likely, there is the possibility that Starz could come back to the negotiating table
4. Netflix now has 6 months to find content
5. The lowered valuation as very compelling compared to other fast growing, disruptive Internet companies.
Specifically on valuation, Chung notes that at $210 shares would trade at a 2012E EV/sales of 2.2X, a discount to LinkedIn (Nasdaq: LNKD) at 10.3x, Pandora (NYSE: P) at 7.3x, OpenTable (Nasdaq: OPEN) at 7.0x, and Priceline (Nasdaq: PCLN) AT 4.4X.
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