Why Netflix Inc Will be a $100 Billion Company (One Day) презентация

to better-than-expected subscriber growth.
It’s also the best-performing stock in the S&P 500, and its market cap is already approaching $50 billion, up from near $20 billion at the start of the year

2015 has been a special year

is disrupting a huge industry.

Let’s take a look at each of these factors.

3 big reasons why the stock could double

domestic and 23.3 million international).
Membership is up more than 30% from a year ago, and is re-accelerating domestically, which management attributes to an improved slate of original programming.

Netflix membership is soaring

has improved each year and is set to approach 30 million by the end of 2015. Continued expansion next year should ensure accelerated growth.
Meanwhile, domestic growth has been stable, indicating the company is far from maturing.
Management expect to reach 60 to 90 million domestic subscribers.

profitability because revenue is increasing on the same base of costs.
Management has outlined a goal of 40% domestic contribution margin by 2020.

The power of Netflix’s business model

two quarters.
At the current growth rate, the company will hit its 40% target by next year - four years early.

Domestic Contribution Margin is re-accelerating

a home entertainment industry worth of hundreds of billions of dollars.

Comcast, the leading U.S. cable provider, alone is worth $160 billion alon

Reed Hastings said that the number of people who are, “ "video entertainment, watch some TV and have enough money to pay for a service, that's a very large potential market."

million domestic household at an average selling price of $120/year, which assumes in slight increase fees, would yield close to $3 billion in profit.
Assuming $1.5 billion in other expenses, a 50% increase from today, Netflix would have $1.5 billion in domestic streaming operating income.

The profits are too

give the company $1 billion in net income from that segment.
Based on the upper limit of 90 million domestic subs, Netflix would have $2 billion in net income.
That does not include income from DVD-by-mail or international streaming.

from domestic streaming, Netflix’s P/E would be at most 100 at a $100 billion valuation.
That seems like a modest figure given the huge market opportunity and the contributions from international streaming, which will likely bring in more subscribers than domestic.