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Sky Deustchland Launches Netflix (NFLX) Competitor in Germany

NEW YORK (TheStreet) -- Sky Deutschland, owned by 21st Century Fox  (FOXA) will soon enter the video streaming market in Germany and Austria with a new service called Snap.

The new Snap service will compete with Amazon's (AMZN) Lovefilm service, and will beat Netflix (NFLX) to the German market. Netflix recently expanded to many European and South American countries, but Germany and Austria are on the long list of countries that still don't have access to the streaming media service.

Users of the new service will be able to access content from Sky's large library of content. According to Hollywood Reporter, the catalog includes titles such as Up, Toy Story 3, and Iron Man 3. The service will also give German subscribers access to back catalog content from HBO including True Blood and Boardwalk Empire.

Snap will cost 9.90 euros, making it more expensive than Amazon's Lovefilm.

TheStreet Ratings team rates 21st Century Fox as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:

"We rate 21st Century Fox (FOXA) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 17.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, FOXA's share price has jumped by 35.01%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, 21st Century Fox's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 21st Century Fox has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, 21st Century Fox increased its bottom line by earning $2.91 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $2.91).
  • 37.02% is the gross profit margin for 21st Century Fox which we consider to be strong. Regardless of FOXA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FOXA's net profit margin of 17.77% compares favorably to the industry average.
  • You can view the full analysis from the report here: FOXA Ratings Report

Stock quotes in this article: FOXA, NFLX, AMZN 

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