Are all likely affecting the stock. However when it's all said in done who else is competing with against netflix?
Well, HBO, Amazon and Hulu in the US. In my country (the UK), there are several local competitors; Now TV, Sky, BT, 4oD, BBC iPlayer (sort of), Amazon. I would assume it's a fairly similar situation in most of the markets they operate in (e.g. HBO Nordic in Scandinavia).
HBO won't be available to non-cable/satellite subscribers until next year, has limited content, and at this point unknown pricing. (Seems unlikely to be less than Netflix, might end up being 2x Netflix.)
Amazon has limited content, a crappy UX, and a pricing perception problem (your only option is $99 up-front).
Hulu has very limited content, ads even for paying customers, and a crappy UX, all while charging the same amount as Netflix.
A cord-cutter is almost certainly going to be paying Netflix. They might pay some of the others, too, but maybe not, and probably not all of them. It seems unlikely they'd pay any of the others without paying Netflix.
Is it really competition when your competitor's customers are your customers?
I agree to your points to a certain extent. However, you're forgetting that Netflix also has deficits to the other three. HBO, as I understand it, would most likely have up-to-date recent films, something Netflix severely lacks and people actually want. Amazon is bundled with Prime, a big draw for a lot of people which makes it's offering look more desirable in many ways. Hulu is free (except Hulu Plus). Probably most importantly, all three have unique content which is not available on Netflix (especially true of HBO).
> It seems unlikely they'd pay any of the others without paying Netflix.
I don't think this is necessarily true. With VoD services like these, people will use the ones which have the content they want to watch. As the 'incumbant', Netflix will have certain first mover advantages in terms of brand recognition, but this won't last forever and the market still has lots of room for growth.
This is a pretty good point. I subscribe to both Hulu and Netflix, and I feel like they provide very different services. Netflix provides a large back-catalogue of movies and TV shows, while Hulu is more for watching things which are currently airing. If netflix was able to get episodes of shows on a real-time basis, instead seasons at a time the season after the season is over, it might be competing on a more direct basis with Hulu. As it stands, I feel like they are for different markets, and somebody who wants a Hulu subscription isn't going to be satisfied with Netflix.
I'm not saying the other services don't have content people want that Netflix does not have, I'm saying they're going to want the content Netflix has, too.
On another note: I might be reading it wrong but if netflix made 60 million USD with 53 million users that would be $4 per user per year which seems little.
Amazon already with Prime. With HBO announcement, that's another big threat -- and if it means that more of the existing content producers (on whom Netflix relies for much of its library) are also going to take the same route, its a big problem for Netflix. Once it got real streaming competition (and thus, competitors for titles and exclusivity) and stopped even trying to big a universal library (because that wouldn't work anymore), Netflix -- and its competitors -- were essentially limited to being HBO but without the burden of cable (and without having yet built up the library of first-party content HBO has). But once HBO gets into that game, the opportunities got a lot narrower.
1. Very high P/E ratio. Thus strong future growth is baked into price. So, a buyer of the stock today is already paying for strong growth.
2. Based on #1, the risk is higher as you're prepaying for future growth. And the future is uncertain.
3. Institutional ownership is already high, so you're more likely to see outflows than strong inflows. I don't like investing on this metric, but it does affect price during market fluctuations.
4. Price/Sales is high.
5. Low margin
I don't trade much, but if I did I'd stay away due to the lack of shorts, thus no short squeeze to play.
Of course, on the positive side it dominates its market, has strong growth, and generates free cash flow.
Again, I did not do a genuine analysis so I could be way off on some of the above.