Analysts Remain Optimistic For Netflix Stock For 2016
The streaming media giant has performed exceptionally well in 2015 and analysts predict that it will continue to do is in 2016 as well.
Netflix, Inc. was the hottest stock of year 2015, while S&P 500 barely managed to make a change in its yearly gains, the streaming media giant’s stock price rallied up by as much as 142%. However Netflix stock was down on December 28, 2015. According to Barron’s, the giant is overvalued in comparison to Google’s video streaming giant YouTube.
According to the report by Barron’s, YouTube currently has over 15 times more users than the streaming media company while it only earns 6.5% revenue per user. Apart from YouTube being a major competition, investors of the stock should now be more concerned about the increasing competition from Amazon Prime and Hulu.
Hulu could be one of the biggest rivals for the streaming corporation in 2016, it might still be away behind it right now but many believe that it could be standing right opposite to Netflix in the coming years. Hulu received its first Golden Globe Nomination this year on its original content series which indicates that the company is doing well in the original content production. It is safe to say that in the next few years customers will have a variety of online streaming media companies to subscribe from.
However in year 2015, the stock has rallied up by 140% outperforming the Silicon Valley giant Apple, Inc. This increase in the stock price added it to the list of Big Four Tech stocks of the year which are Facebook, Inc., Google, Netflix and Amazon.
After the stock stumbled on Monday to a share price of $113.96, it was up again by 1.68% to a share price of $119.08 on Tuesday. The management of the streaming giant is fairly confident about the upcoming year and the performance of its stock. The chief executive officer Reed Hastings will be earning $19.95 million in 2016 from an initial salary of $14.7 million, indicating an increase of 36%. However 95% of this amount will be in stock options. On the other hand, Sarandos will be earnings $16.8 million in 2016 out of which $11.8 million will be in stock options.
David Wells will receive a pay of $4.2 million next year indicating an increase of 14%, out of which 43% will be in stock option. Even though everyone is quite optimistic about the stock for the next year, an analyst, David Einhorn of Greenlight Capital, is quite bearish. He stated that his company is shorting the company due to the recent declining trend in the earnings.