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Netflix Continues to Grow Paying Subscriber Count, Free Cash Flows Elusive for Now

publication date: Oct 23, 2019
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Image Shown: Netflix Inc continues to grow its global net subscriber count as it pushes deeper into overseas markets and fends off rising competitive threats. Image Source: Netflix Inc – Third quarter 2019 IR presentation.

While we doubt Netflix will generate meaningful free cash flows in the short-term given its large content investments and marketing spend, we think the company’s longer term trajectory is quite promising. Competitive pressures are building, however, and while growth ensues at the firm, we aren’t interested in shares of NFLX given its wide fair value estimate range (small changes in Netflix’s trajectory can have an outsized influence on its intrinsic value). That said, we see the company being able to stay a leader in the streaming race.

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