YouTube (GOOG) Seen as Nearly Double the Value of Netflix (NFLX)

Netflix (Nasdaq: NFLX) shares are lower Monday following cautious commentary in Barron's last weekend.

Barron's noted how Alphabet's (Nasdaq: GOOG)(Nasdaq: GOOG) YouTube was twice as valuable as Netflix. The article notes three solid reasons for folks to take another look at YouTube:

1. Growth is still happening at breakneck speeds. It was reported that viewing time rose 60 percent at one point this year while mobile viewing also doubled. The key 25-to-34-year-old viewing population was said to watch 8.6 percent less time on TV, which is also down 24 percent over the last four years.
2. Money is following viewers. While Netflix bumped the price of its subscription service up by $1 per month, YouTube is also rolling out is own subscription service. Most of YouTube's money still comes from advertisers and that total is expected to double within five years. Revenue should move from about $7 per user up to around $13 per user by 2020, which isn't a stretch for the company.
3. Parent company Alphabet is becoming more shareholder friendly through capital returns, while annual cost growth has slowed to 9 percent in its most-recent quarter, from 28 percent in the same period last year.

Overall, Barron's notes recent commentary from Evercore: YouTube today serves 19 percent of the Internet’s videos, but only 9 percent of video ads. By 2020, the business could haul in $28 billion annually, keep about half after paying video creators, and still be growing by 20 percent a year.

YouTube is then worth about $85 billion today, or around $65 per user (which is set at 1.3 billion people). Some may deem that number conservative as the landscape for online advertising changes over the next few years.

Shares of Alphabet are up 0.5 percent amid a negative trading session for broader markets on Monday.

You May Also Be Interested In

• Tuta Mail Files Google Complaint Under EU Tech Rules - Reuters
• Analysts are less bullish on Magnificent 7, Big Tech as rally loses steam
• Texas Instruments (TXN) jumps on first above-consensus guide in seven years