Neal Quinn

Don't Panic

Month: March 2019

Netflix Inc. (NFLX) Valuation

March 16, 2019 /

Near term Optimize, then long term boulders in the stream ahead for Netflix.

Investment Recommendation
Our recommendation is a Sell for NFLX in the near term as it current price for investors to take their earnings now before current headwinds potentially negatively impact the stock price.

The past performance is the company shows good potential for long term stable growth and would watch for buying opportunities if stock moves closer to its value target below.
  • Valuation of business estimated to be $77.9B
  • We believe NFLX currently has more downside risk than upside potential at its current market price and long term outlook.

Current Price: $361.21 / share

Revenue Growth

Operating Margin

Return on Capital

Reinvestment % EBIT(1-t)

Value Target: $124.00 / share

3.0%

14.86%

8.74%

34%

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Starbucks (SBUX) Valuation

March 14, 2019 /

Near term robust market position. Medium term growth but intense local and international competition ahead for Starbucks.

Investment Recommendation
Recommendation is a HOLD for SBUX.

The past performance is the company shows good potential for long term stable growth and would watch for buying opportunities if stock moves below its value target.
  • Valuation of business estimated to be $103.37B
  • SBUX will enjoy excess returns in the near term. but that over the next several years local competitors in the different markets around the world will reduce return on capital.

Current Price: $70.74 / share

Revenue Growth

Operating Margin

Return on Capital

Reinvestment % EBIT(1-t)

Value Target: $65.01 / share

2.61%

16.73%

7.50%

37.18%

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