Netflix Gearing Up to Launch in Latin America

By May 8, 2011, 6:15 PM Author's Blog  

U.S. online streaming-DVD delivery giant Netflix, Inc (NFLX) is working on a push into Latin America and is close to announcing deals with three of the continent’s largest broadcasters to begin streaming programming online in Argentina, Brazil, Chile and Mexico, the Financial Times reports, citing several people briefed on the plans.

According to FT, the Los Gatos, Calif.-based group is negotiating to purchase telenovelas as well as other content material from Grupo Televisa and TV Azteca of Mexico and Globo of Brazil.

While Netflix declined to comment on its Latin America plans, it told FT that the group had considerable international ambitions based on the serious upside that exists in global expansion. Netflix, whose subscriber base could top 50 million by 2013, has more than 23 million subscribers in North America, including about 800,000 in Canada – up from about 15 million a year ago.

Netflix CEO Reed Hastings, who has seen his co.’s subscriber base more than double in the last 24 months and its market cap more than quintupled to $12.5 billion, told Bloomberg TV last week that Netflix was on a 70% growth curve. Latin America would become Netflix’s third market.

There is no doubt that international expansion will further broaden the co.’s reach, which is something that Netflix may need given not only bearish considerations over the stock’s lofty valuation, but also that the bears at this point fear Netflix’s momentum domestically is waning when considering its vulnerability to competition.

Whether Netflix will continue to grow its lead in the digital race remains to be seen. In the meantime, from a valuation perspective, NFLX currently trades at a 5.08x on a price to sales basis. The equity has a trailing P/E of 65.90, a forward P/E of 35.25 and a P/E to Growth ratio of 1.73. The median Wall Street price target on the stock is $270 with a high target of $330.00.

NFLX closed Friday at $229.60.

  • SHARE:
  • Share on StockTwits

LEAVE A COMMENT

SPY206.52  chart+0.88  chart +0.43%
GOOG516.35  chart+5.25  chart +1.03%
AAPL111.78  chart-0.87  chart -0.77%
TSLA219.29  chart+1.03  chart +0.47%
BBRY9.99  chart-0.08  chart -0.79%
NFLX340.12  chart+5.70  chart +1.70%
FB79.88  chart+1.48  chart +1.89%

Nikkei17621.4  chart+411.35  chart +2.39%
Shanghai0.00  chartN/A  chartN/A
UK6545.27  chart+79.27  chart +1.23%
France4241.65  chart-7.84  chart -0.18%
Germany9786.96  chart-24.10  chart -0.25%