Netflix (NFLX) continues to surprise
Netflix continues to surprise the market as they continue to find ways of luring new subscribers. Despite concerns over Blockbuster eating their lunch, which caused Netflix to lower the subscription prices, they continue to grow. At the same time, Blockbuster continues to lag behind. Their business model is simple and sound. Rent as much movie as you want; keep it as long as you want for a monthly fee. The company is also moving into film download, which is the next evolution in this space. In terms of their stock, they're currently trading with a P/E ratio of 25, which is a little expensive. However, their closest competitor is Blockbuster, which is losing money. Therefore, it is a little difficult to gauge their true value. At around $23/share, we believed it is a worthwhile investment with potential to move upward within the next few weeks as the third quarter comes to a close.
