Is Netflix A Bargain?

Netflix stock rose from $35 to $300 a share in the 2 1/2 years ending in July. That's when investors should have sold because since then, the price has been halved.our editor recommendsHumbled Netflix Separates DVD and Streaming Businesses, Abandons Price Changes But there are still a few bulls who see the dramatic slide as a buying opportunity. Ingrid Chung at Goldman Sachs, for example, maintains her "buy" recommendation, telling clients the Reed Hastings-led company should climb back to $270 in the next six months (the stock closed at $128.53 Thursday). STORY: Netflix Wants to Change Law Against Revealing Video-Viewing History Chung says the recent defection of 1 million customers was due to unwarranted negative press about a Sept. 1 price increase and the split of the company's streaming service and DVD-by-mail, which will be called Qwikster. Would-be competitors, including Dish Network's Blockbuster, will find tough barriers to entering the subscription streaming business, she adds. Piper Jaffray analyst Michael Olson also remains bullish on Netflix, with a price target of $300. But Piper Jaffray analysts acknowledge there are other dangers lurking. The firm wrote, "If Amazon or Google purchases Hulu, shares of Netflix would likely respond negatively." Related Topics Netflix

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