Netflix (NFLX) Overtakes YouTube

NEW YORK (TheStreet) -- Netflix (NFLX) surpassed Google's (GOOG) YouTube as the top online video service for the first time in three years.

According to a survey of 1,000 online users done by RBC Capital Markets, 44% used Netflix to watch television programs and movies, compared to 43% for YouTube. Last year the numbers were 37% and 40% in favor of YouTube.

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Streaming service competitor Hulu was a distant third at 27%, down from 28% last year. Amazon Plus (AMZN), while coming in fourth with 22%, saw an increase from last year's 15% mark.

In conjunction with a larger market share in the U.S., RBC's U.K. survey -- which polled 1,500 users -- shows that the video streaming service continues to be popular across the pond. Some 22% of respondents are using the service, compared to 15% for U.K. competitor LOVEFilm.

In the report published Sunday, RBC's Mark Mahaney had high hopes for the future of Netflix, saying "Our key survey findings support the conclusion that Netflix offers an increasingly compelling consumer value proposition in the U.S."

"We continue to believe that Netflix has achieved (a) level of sustainable scale, growth, and profitability that isn't currently factored into its stock price. Netflix is on track to become an Internet video utility."

Netflix closed Monday's trading session down 1.88% at $439.95, but is up 0.10% in after-hours trading.

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Seperately, TheStreet Ratings team rates NETFLIX INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NETFLIX INC (NFLX) a BUY. This is driven by multiple strengths, 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 robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • The revenue growth came in higher than the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 24.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 507.69% and other important driving factors, this stock has surged by 146.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • NETFLIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NETFLIX INC increased its bottom line by earning $1.85 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($4.09 versus $1.85).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 513.1% when compared to the same quarter one year prior, rising from $7.90 million to $48.42 million.
  • The gross profit margin for NETFLIX INC is currently very high, coming in at 82.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.12% is above that of the industry average.
  • You can view the full analysis from the report here: NFLX Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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