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(Source: TC2000.com)
While several high-octane growth names have seen a relentless bid under them since the election, NFLX and AMD have taken a back-seat, with AMD underperforming since its Xilinx (NASDAQ:XLNX) acquisition and NFLX seeing muted returns based on fears that a return to normal activity after COVID-19 would weigh on subscriber growth. In the former case, the deal is finally near closing which should help the stock regain its momentum. In the latter case, NFLX just came off a much weaker quarter than anticipated, with net streaming additions coming in at just ~4MM, down from guidance of ~6MM. While this is obviously a disappointment, it does not affect the long-term picture for the stock, which remains quite bullish. This long-term outlook includes significantly higher free cash flow, continued margin expansion with higher prices, and the fact that competition or not, there is a very big pie for all streaming companies as the shift from cable to streaming options continues. Let’s take a closer look at NFLX below:
