This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why It's Time to Buy Facebook, Priceline, Pandora and Netflix

As for Netflix and Pandora, they are a bit tougher to value, but both are disruptive in their respective fields of online content distribution and Internet radio. 

With Netflix shares having gone into bear market territory, down 23% from the March 4 high, and off 5% year to date, Anmuth is confident "Netflix can continue to improve the quality of its streaming video service to drive greater leverage and scale across its subscriber base, and ultimately exercise pricing power through tiered plans." He believes that the launch of House of Cards in February, along with other content, likely boosted subscriber additions, and that momentum should carry throughout the year.

The biggest fears surrounding Netflix, aside from increased competition, are the concerns about net neutrality, demonstrated in the recent additional payment from Netflix to Comcast (CMCSA). "However, we believe the recent Comcast deal came at economics that did not change the equation much for Netflix, and we have already seen early improvements in Comcast speed," Anmuth note. "We believe there is slightly more streaming video competition on the margin, with both Amazon and Hulu pushing into originals more and Amazon into the living room with FireTV. However, we continue to believe Netflix content is superior, and FireTV also features Netflix.

Terms of the Netflix/Comcast deal, announced in February, haven't been disclosed.

Anmuth rates Netflix shares "overweight."

Pandora, which has seen its shares collapse 28% since their March 5 high, remains Anmuth's favorite SMid-cap name (rated "overweight"), as it's a "highly compelling pure play on mobile advertising."

Must Read: Where to Get the Samsung Galaxy S5 For $100

Here's Anmuth thoughts on Pandora:

"We note recently released March listener metrics included reacceleration of hours (+14% Y/Y and +13% M/M vs. +9% Y/Y growth in Feb-14 and +8% M/M growth in March-13) and continuation of gains in U.S. radio market share despite some increased competition. Importantly, we believe hours growth will accelerate more in 2Q as Pandora fully laps its 40 hour mobile listening cap starting in April. We believe that Pandora is at an inflection point on monetization, and profitability should increase going forward as 1) Pandora's 9.1% market share of total US radio continues to ramp; 2) radio buy-side platform integration and backend improvements should continue to remove friction from the buying process and attract more ad spend; 3) Pandora continues to build out its local sales force (now in 32 of top 40 markets); and 4) cost-control policies, including the limit to mobile skips, should help control content costs, enabling both more investment and better profit. Recent concerns continue to center around hours growth-even with better than expected March data-and increased competition. We look for significant increases in 2Q and 3Q hours growth, but also believe that low mobile sell-through rates (30-35%) and higher pricing can drive meaningful RPM improvements, with greater de-coupling between growth in hours and growth in revenue over time."

-- Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FB $116.73 7.20%
PCLN $1,347.06 -0.49%
AAPL $95.03 -2.90%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs