NFLX: Maybe, Finally.

2021年9月2日

Good morning everyone! Every Thursday morning we highlight our favorite trade setup of the week. This week, we will be taking a look at a breakout setup in NFLX.

Now, before everyone goes and mentions how strong the stock is... don't worry. We know. We expect the stock to consolidate up here for a little while given how strong the ADX / RSI is. However, over the next week or two, it's likely this breaks out higher. The stock has traded sideways for almost 14 months, and in that time has continued to churn out monstrous profit growth.

(Growth by TTM Quarter YoY, most recent on right.)

Total Revenue
35.08% 30.24% 27.03% 26.74% 27.62% 28.82% 28.35% 26.19% 24.01% 23.31% 21.91%

Gross Profit
59.21% 48.93% 38.01% 38.43% 32.43% 35.49% 35.93% 28.93% 25.96% 31.73% 32.25%

Operating Income
91.40% 57.32% 36.63% 44.46% 62.24% 91.84% 101.67% 73.18% 76.07% 80.02% 61.83%

Net Income
116.71% 88.60% 16.36% 11.96% 54.13% 76.41% 132.87% 98.48% 47.91% 68.42% 63.79%

With growth rates like this, you would expect the stock to be on the run of a lifetime. However, as mentioned, the stock is trading sideways, AND it's trading at a 50% discount to its long term P/E multiple. Some of this discount can be explained by the nominally slowing growth, but this still appears to be a buyable opportunity on a breakout.

Sure, the stock may trade back down to support at 460, but if if does that, then it's a REAL opportunity. Execution candles matter here.

Cheers!