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NFLX – Market expectations are for Uniform ROA expansion, but management may have concerns about interactive gaming, subscriber growth, and content

June 2, 2021

  • Netflix, Inc. (NFLX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 36.4x Uniform P/E, implying bullish expectations for the firm. However, management may have concerns about their interactive gaming capabilities, subscriber growth, and new content variety
  • Specifically, management may lack confidence in their ability to increase subscriber growth as the world reopens, enhance their interactive gaming capabilities, and offer a new variety of content every quarter. Moreover, they may have concerns about account sharing, the potential of their upcoming big title launches, and their low-ARPU high-volume strategy. Additionally, management may lack confidence in their ability to provide the right features to meet viewers’ broad set of needs and leverage go-to-market partners to attract new demographics