Verne,
I'd agree that with a just-profitable company that is growing rapidly, you can't use current earnings to compute a market cap. You have to estimate the *future* earnings stream, which is difficult.
Although, they have made projections for earnings for 2004, so you can always look at that.
Assets. Now that makes a little more sense to me, but again, you need to know the estimated *earnings* per customer, not just their monthly fee, together with some estimate for average length of tenancy. Right? Suppose it costs NFLX 16 bucks per month to get the customer to pay that $20/month. Why would you use $20 * 24 months * # customers to compute assets? As opposed to the $4. If churn is 6% per year, 2 years may be low.
But assets also are very different from market cap. Sometimes people talk about the "book value", or "cash value" of a company, but that doesn't include projected future earnings from their customers.
Perhaps Ohio could provide some more insight here.
Doug
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