Netflix, Inc. (NFLX): Still Growing, But Is It All Priced In?

Speaking of cable, let’s take a quick look at Comcast Corporation (NASDAQ:CMCSA) which is a favorite of mine because of the diversified nature of their business.  Aside from their cable subscriber base of 22 million customers (largest in the U.S.), it also has acquired NBC Universal, which consists of cable networks such as CNBC and USA, broadcast network NBC, a major movie studio, and the Universal theme parks.  Comcast Corporation (NASDAQ:CMCSA) is also attractively valued at 17 times forward earnings, considering that the company is expecting 15% annual earnings growth over the next several years.

Conclusion

While Netflix, Inc. (NASDAQ:NFLX) may appear a bit expensive, consider how small their current subscriber base is relative to its potential.  Netflix is yet to target some of the more populous areas of the world, such as most of Europe and developing countries with growing middle classes like China and India.  This is not to mention the trend toward smart TV’s right here in the U.S., which make integration with services like Netflix much easier.

Over time, who knows the true potential of streaming movies?  Having said all of that, I would wait until after the company reports first quarter earnings on Monday the 22 before jumping in.  If everything is going as well as expected, Netflix, Inc. (NASDAQ:NFLX) is probably a safe bet.  On the other hand, if the earnings report is a little below expectations, you may get a chance to get in to this rapidly growing company at a discount.  Wait and see…

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix