TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Netflix's quarter was modestly better than reset bearish expectations...but not by much. 1M subscriber gains projected for 3Q below consensus 1.7M.</li>
<li>Timeline for reaccelerating subscriber growth from advertising and password sharing still seems shockingly long. </li>
<li>Netflix remains a top funding short for the forseeable future, we think $210 is the high end of the range, $170 the low end, but could justify $150.</li>
</ul>


Netflix's quarter was modestly better than reset bearish expectations...but not by much. 1M subscriber gains projected for 3Q below consensus 1.7M.
Timeline for reaccelerating subscriber growth from advertising and password sharing still seems shockingly long. 
Netflix remains a top funding short for the forseeable future, we think $210 is the high end of the range, $170 the low end, but could justify $150.


Netflix 2Q22: Low Growth, Low FCF, Low (Management) Conviction

<ul>
<li>Netflix net add bogey appears to be for 2Q losses in the -2-3M range (guide was -2M), if it hits this number is irrelevant, the 3Q/2H22 guide is more important.</li>
<li>BBG was bullish on NFLX's quarter recently, but we think misses the forest from the trees regarding ever ramping competition. </li>
<li>Ad-Based Netflix subs *might* hit by end of 2022, but won't move the needle for 18 months.</li>
</ul>


Netflix net add bogey appears to be for 2Q losses in the -2-3M range (guide was -2M), if it hits this number is irrelevant, the 3Q/2H22 guide is more important.
BBG was bullish on NFLX's quarter recently, but we think misses the forest from the trees regarding ever ramping competition. 
Ad-Based Netflix subs *might* hit by end of 2022, but won't move the needle for 18 months.


Tactical TMT 2Q Earnings Trading Idea: Short NFLX

High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>The second quarter earnings season officially kicked off last week with financials getting things started. </li><li>Earnings season will pick up this upcoming week with key reports expected from notable names like Bank of America, Tesla, Netflix, Johnson &amp; Johnson, and Capital One. </li><li>We already know that inflation in the form of rising input costs like energy and labor will eat into profit margins and earnings. </li></ul>

The second quarter earnings season officially kicked off last week with financials getting things started. Earnings season will pick up this upcoming week with key reports expected from notable names like Bank of America, Tesla, Netflix, Johnson &amp; Johnson, and Capital One. We already know that inflation in the form of rising input costs like energy and labor will eat into profit margins and earnings. 

<ul>
<li>Intel warned that conditions outlined in 1Q22 have worsened, key to see what AMD says tomorrow.</li>
<li>Netflix - Roku rumor doesn't make much sense, we think its more likely Roku cut off insider selling because it is looking to acquire Starz.</li>
<li>Netflix churn is rising among longtime customers - going to ad-supported Peacock and Paramount. We think another guide down is coming in 2Q22.</li>
</ul>


Intel warned that conditions outlined in 1Q22 have worsened, key to see what AMD says tomorrow.
Netflix - Roku rumor doesn't make much sense, we think its more likely Roku cut off insider selling because it is looking to acquire Starz.
Netflix churn is rising among longtime customers - going to ad-supported Peacock and Paramount. We think another guide down is coming in 2Q22.


Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul><li>Netflix had a horrendous start to the year after reporting a loss of nearly 200,000 subscribers and a further expectation of losing close to 2 million subscribers by the coming quarters.</li><li>The management is considering advertising as a potential revenue stream in these markets while continuing to focus on building high-quality original content.</li><li>We also have a dedicated analysis of the company's Environmental, Social, and Governance (ESG) risk scores in order to evaluate the sustainability risk.</li></ul>

Netflix had a horrendous start to the year after reporting a loss of nearly 200,000 subscribers and a further expectation of losing close to 2 million subscribers by the coming quarters.The management is considering advertising as a potential revenue stream in these markets while continuing to focus on building high-quality original content.We also have a dedicated analysis of the company's Environmental, Social, and Governance (ESG) risk scores in order to evaluate the sustainability risk.

Netflix Inc.: How Will The Subscriber Loss Nightmare End?

United States

Netflix Inc. is an Internet subscription service for watching tv shows and movies. Subscribers can instantly watch unlimited TV shows and movies streamed over the Internet to their TVs, computers and mobile devices and in the United States, subscribers can receive standard definition DVDs and Blu-ray Discs delivered to their homes.

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Netflix Inc (NFLX US)

Netflix 2Q22: Low Growth, Low FCF, Low (Management) Conviction

Netflix has become a legacy cable network - little pricing power, little volume growth, and massive competition. Oh yeah, minimal FCF a management...

Aaron Gabin

Tactical TMT 2Q Earnings Trading Idea: Short NFLX

Recent commentary that Netflix subscriber figures may be better than expected will prove irrelevant. Unrelenting competitive intensity will trigger...

Aaron Gabin

Weekly Stock Bullfinder - Week of 7/18

Earnings season will pick up this upcoming week with key reports expected from notable names like Bank of America, Tesla, Netflix, Johnson &...

Weekly Stock Bull Finder

TMT Quick Hits: INTC/AMD, NFLX/ROKU

Intel's overly bullish 2H guidance from last quarter is already getting talked down. Netflix-Roku rumor is unlikely...and only thing that could...

Aaron Gabin

Netflix Inc.: How Will The Subscriber Loss Nightmare End?

Netflix had a horrendous start to the year after reporting a loss of nearly 200,000 subscribers and a further expectation of losing close to 2...

Baptista Research

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