• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Consumer Discretionary

Netflix Will Be a Monster as Long as Millennials Love Sitting on Their Couches

What a quarter.
By BRIAN SOZZI Jul 17, 2017 | 05:22 PM EDT
Stocks quotes in this article: TSLA, PG, HPQ, T, NFLX, AAPL

Remember all that junk on investing you learned in college? Toss it in the trash, at least when it comes to Netflix (NFLX) .

Shares of the video streaming king ripped to an all-time high after blowing it out of the water with respect to second-quarter results on Monday. What was already a pricey stock is about to become that much richer, which must be killing the well-known Netflix valuation bears on Wall Street. 

Although Netflix didn't impress on earnings per se, it checked all the boxes on what it needed to do to keep momentum investors enthralled:

  • Strong U.S. subscriber growth. 
  • Strong international subscriber growth. 
  • Execs talked strongly about how Netflix continues to upend its industry. 
  • Company made money (always an unknown when it comes to a tech company investing in its future). 
  • Signaled more interesting things ahead (content, growth plans, etc.). 

Bottom line on Netflix: Shorting the stock will likely continue to be a losing proposition as long as the company continues to impress Wall Street. And why is the company capturing minds out in the financial district? Pretty simple. There is a fundamental trend among millennials to sit home after work and watch movies. Whether it's due to sheer exhaustion, or a preference to cut the cord, this large group of people is consuming massive amounts of on-demand content. That will probably only strengthen, believe it or not, and push Netflix to even higher heights of valuation insanity. 

Love me some on-demand Rocky 1.

Reed Hastings has to be happy.
Reed Hastings has to be happy.

What's Hot on TheStreet

Elon Musk keeping it real for a change: Tesla's (TSLA) Elon Musk just gave the obsessed bulls on his company's future something to strongly consider, TheStreet reports.

Speaking at the National Governors Association summer meeting in Rhode Island on Saturday, Musk reiterated that shares of Tesla are trading at a level "higher than we have any right to deserve" based on optimism about the company's future.

"Those expectations sometimes get out of control," Musk added. Meanwhile, TheStreet reports Tesla could be at risk of a nasty surprise soon: the end of tax credits for electric cars in the U.S.

Musk seems to have regretted his stock price comments -- he took to Twitter in the afternoon to clarify his comments. 

Procter & Gamble under siege: Peltz's Trian Fund Management plans to launch a fight for a board seat at Procter & Gamble (PG) , making it the largest company to face a proxy battle, The Wall Street Journal reported Monday.

Trian, which owns about $3.3 billion of P&G stock, is said to be seeking a single board seat for Peltz at the company's annual meeting that could take place in October. P&G has reportedly been in talks for five months, but the company is said to have rejected naming Peltz as a director last week.

Sales at P&G -- and its stock price -- have stalled due to pricing pressure and competition.

As TheStreet's Ron Orol reported in June, look for the consumer packaged-goods company to announce plans for spinoffs, sales or even a swap out of business units. If major M&A doesn't come soon, a Trian director-battle or white paper chock-full of activist demands could be next.

And Trian likely will demand significant M&A activity. Spinoffs and other major deals often follow when the activist investor acquires a large stake. Trian and other activist fund managers often push to have large companies break themselves up with the goal of extracting value by focusing the market on various parts of a business that might be hiding inside confusing conglomerate structures.
 
Here is what Orol is currently reporting.
 
Behind the scenes: TheStreet's Tracy Byrnes has a great talk with Carly Fiorina for our new web series "Alpha Rising." Fiorina was the first first woman to head a Fortune 500 company when she became CEO and president of Hewlett-Packard ( HPQ) and she was the first female officer at AT&T ( T) . Must-watch stuff.
 
Boo Apple bears: Deutsche Bank analyst Sherri Scribner reiterated a "hold" rating for Apple ( AAPL) and raised her price target for the tech giant to $132, up from $130.

Scribner said expectations for Apple are too high, warning investors that they might be disappointed with iPhone sales growth in 2018 and 2019.

A market overly optimistic on future sales is "ignoring the fundamental challenges Apple faces in the smartphone market," Scribner wrote. Those challenges include saturation due to elongated refresh cycles, declining share, increased Chinese competition and a growing secondary market.

More of What's Trending on TheStreet:
  • Tesla CEO Elon Musk Basically Just Said His Car Company Is Worth Too Much
  • I Just Tried Burger King's New 570 Calorie Chicken Parmesan Sandwich -- Here's How I Felt After
  • Amazon Files Trademark to Get Into Meal Kits, Continuing to Haunt Blue Apron
  • Millennials Are Making This Huge Mistake When Buying a Home, Say HGTV's 'Property Brothers'
  • Walmart Is Going to Kick Amazon's Teeth In, So Don't Be Surprised When It Happens
  • Alpha Rising: Carly Fiorina on Leadership, Micro Financing and Her Only Regret
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | U.S. Equity | Consumer Discretionary | Earnings | Markets | Consumer | Entertainment | Stocks

More from Consumer Discretionary

Williams-Sonoma Stock Jumps After Private Equity Investment

Bruce Kamich
Sep 26, 2023 1:34 PM EDT

Let's see what the charts are telling us now.

PVH's Charts Look Threadbare as the Apparel Maker Struggles to Gain Traction

Bruce Kamich
Sep 22, 2023 7:45 AM EDT

The technical signals indicate traders and investors should avoid the long side of PVH as its shares could be in for a deeper decline.

Disney Could Use Some Magic Pixie Dust to Help Develop a Base

Bruce Kamich
Sep 20, 2023 8:40 AM EDT

The charts of the entertainment giant have not bottomed, though the shares could make an oversold bounce at any time.

Doing a Walk-Through of KB Home Ahead of Earnings

Bruce Kamich
Sep 20, 2023 7:45 AM EDT

In advance of the homebuilder reporting its third-quarter results, the charts are suggesting its shares could see more weakness ahead.

Bearish Bets: 3 Stocks You Certainly Should Think About Shorting This Week

Bob Lang
Sep 17, 2023 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:13 PM EDT BRUCE KAMICH

    8 Trading Rules from T. T. Hoyne

    You just read the header for this missive and prob...
  • 08:42 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How Elite Traders Make Big Profits
  • 02:58 PM EDT BRUCE KAMICH

    Classic Trading Rules From Bernard Baruch

    Bernard Baruch listed the rules (below) in his aut...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login