Netflix (NFLX) is an obvious play on streaming media. It is the best known play in the area and has been a stellar performer. Like the entire market, it has corrected substantially lately and there is no debate over whether it is a good value.
Netflix is projected to see 56% growth in earnings per share to $4.16 in 2019 but it trades with a PE of 96 which makes it rather expensive. However, Netflix, like Amazon (AMZN) is more about acquiring customers now and profiting from them to a greater degree later.
I don't view Netflix as particularly compelling right now but streaming media and 'cord cutting' are themes that are still growing and maybe even accelerating. I believe a better play on these themes is Roku (ROKU) .
Roku has made its money selling the hardware devices that allow from streaming on various televisions. It has an installed base of about 25 million accounts and is not profitable. However, Roku is now moving into the advertising area of streaming TV which will ultimately be the source of profits for the sector. Ad dollars are slowing moving from traditional media to streaming media and Roku is in a strong position to profit as that transition takes place.
In many ways Roku is similar to Netflix but at an earlier stage of growth. It is still building its customer base and has not yet monetarized it to any great degree.
If Netflix is a bargain here then it is likely that Roku is an even better one. Both will do well as streaming and cord cutting continue to grow but I believe Roku has better potential. Not so coincidentally Roku is my Stock of the Week.