Netflix Inc (NFLX)

[RationalThinker1]

Can a Long explain this to me ? The issue here is the TAM-total addressable market. One of the most bullish analysts is calling for them to have 80M subs in US and 250M elsewhere in 10 years. So let's go with that. Is it safe to assume that the avg. revenue per user will be no more than about $17 /month ? There's resistance at $20, intl. subs pay less in most countries, and with partnership arrangements like Comcast, they net less than full sub price. 330M worldwide subs @ $204/yr (12 x $17/mo) = $67 Billion a year in Revenues. Having saturated the market of subs they won't be growing much at all anymore and If their P/E is similar to a studio like Disney or a cable provider it'll be about 12 - 15. If they net a healthy $13B, that would be a market cap of between $156 and $195B . Measure another way, these companies are valued at about 2-3 x sales. NFLX would have $67B sales in 10 years = $200B using the high end of 3x sales. So if all goes perfectly, they don't lose market share to any competitor and keep all their subs, then in 10 years they'll be worth $200B. They currently have a market cap of $145B. That would mean your return should top out at a total of 38% over the entire ten years ($55B / 145B) to get from current $145B to $200B in 10 years. Would you be happy with earning a grand total of 38% return after holding for 10 years? IF everything goes right? Can someone explain what I'm missing?