DJ Got Netflix and Tesla Wrong? Welcome to the Benevolent Order of Capitulating Bears. -- Barrons.com
By Jack Hough
I'm starting a support group for capitulating bears. Picture more of a lodge feel than a 12-step one. There will be hats with furry ears, one stitched with the ticker symbol for Tesla (ticker: TSLA), and the other with Netflix (NFLX). We'll sponsor a little league team, not worry about its fundamentals, and insist it can go all the way. Our secret handshake will be a short squeeze.
Mind you, my own gloom has been limited to individual highfliers. I've been bullish on the market for years, because I long ago resolved to always guess up. Two-thirds of the time I'm right, and the other third, I'm early, and it's the Federal Reserve's fault.
Predicting S&P 500 returns is easy, too. I start with earnings growth, pegged at 10% this year. Divide by half, for estimate cuts. Add two points for dividends. Take off a point, in case elevated price/earnings ratios ease. Now add that point back, because with interest rates this low, reversion to the mean is on disability leave.
My calculator watch says all that comes to 7%. The margin of error is 45 points in either direction.
Fast-growing companies are the difficult part. I've been cautious about Netflix, by far the best-performing stock in the S&P 500 over the past decade, which is starting to feel like having a Sell rating on joy. This past week it missed forecasts for U.S. subscriber growth, and its shares gave up 4% in a day. My inner, recovering bear is tempted to growl about rising competition: This quarter will be the first full one for Disney+, and next quarter will see the launch of NBC's Peacock and HBO Max.
But Netflix now has five subscribers outside the U.S. for every three inside, and it easily beat expectations for international growth in its latest report. Its rivals might not match its reach for many years. Management says the $3.3 billion it burned in 2019 was the low point, and that it will consume $2.5 billion this year "on the glide path, slowly, towards positive free cash flow." Daniel Salmon, who covers the stock for BMO Capital, wrote that Netflix could soon attract interest from growth-at-a-reasonable-price investors. He sees more than 25% upside.
Skeptical? I'm trying to quit, thanks. Until this bull market rolls over, my comments on Netflix will be best summed up by two shows it licenses: "Cheers" and "Glee." No "Lost In Space" cracks, please.
Tesla has left treadmarks on my doubt, too. It's stock is up 123% in just six months. This past week the company became the world's second most valuable car maker behind Toyota (TM), if we count only shares, not debt. And Patrick Hummel at UBS published the most complimentary Sell recommendation I've seen. "We take a more bullish fundamental view on Tesla's technology and cost lead in hardware & software," he wrote, raising his price target from $160 to $410, versus the stock's recent $572.
Hummel expects 10% operating margins and $3 billion to $5 billion in annual free cash flow from 2020 on. But he thinks shares are "over-shooting right now."
Maybe. But I've been underestimating over-shooters for too long. That's why I'm trying to turn incautiously optimistic on fast-growers. It's difficult, so I need the Benevolent Order of Capitulating Bears for support. If you elect me Poobah, I have plenty of ideas. Frankly, I've been impressed with what the Shriners have done riding those little cars at charity events. I have a plan involving miniature Pelotons. That reminds me: Have you seen that this fiscal year's cash burn estimates for Peloton Interactive (PTON) have more than doubled since September, to $538 million?
Sorry. Old habit.
Read more Streetwise: Buy These Car Chip Makers Instead of Tesla or GM
Write to Jack Hough at jack.hough@barrons.com
(END) Dow Jones Newswires
January 24, 2020 06:14 ET (11:14 GMT)
DJ Got Netflix and Tesla Stock Wrong? Welcome to the Benevolent Order of Capitulating Bears. -- Barrons.com
By Jack Hough
I'm starting a support group for capitulating bears. Picture more of a lodge feel than a 12-step one. There will be hats with furry ears, one stitched with the ticker symbol for Tesla (ticker: TSLA), and the other with Netflix (NFLX). We'll sponsor a Little League team, not worry about its fundamentals, and insist it can go all the way. Our secret handshake will be a short squeeze.
Mind you, my own gloom has been limited to individual highfliers. I've been bullish on the market for years, because I long ago resolved to always guess up. Two-thirds of the time I'm right, and the other third, I'm early, and it's the Federal Reserve's fault.
Predicting S&P 500 returns is easy, too. I start with earnings growth, pegged at 10% this year. Divide by half, for estimate cuts. Add two points for dividends. Take off a point, in case elevated price/earnings ratios ease. Now add that point back, because with interest rates this low, reversion to the mean is on disability leave.
My calculator watch says all that comes to 7%. The margin of error is 45 points in either direction.
Fast-growing companies are the difficult part. I've been cautious about Netflix, by far the best-performing stock in the S&P 500 over the past decade, which is starting to feel like having a Sell rating on joy. This past week it missed forecasts for U.S. subscriber growth, and its shares gave up 4% in a day. My inner, recovering bear is tempted to growl about rising competition: This quarter will be the first full one for Disney+, and next quarter will see the launch of NBC's Peacock and HBO Max.
But Netflix now has more than five subscribers outside the U.S. for every three inside, and it easily beat expectations for international growth in its latest report. Its rivals might not match its reach for many years. Management says the $3.3 billion it burned in 2019 was the low point, and that it will consume $2.5 billion this year "on the glide path, slowly, towards positive free cash flow." Daniel Salmon, who covers the stock for BMO Capital, wrote that Netflix could soon attract interest from growth-at-a-reasonable-price investors. He sees more than 25% upside.
Skeptical? I'm trying to quit, thanks. Until this bull market rolls over, my comments on Netflix will be best summed up by two shows it licenses: "Cheers" and "Glee." No "Lost In Space" cracks, please.
Tesla has left tread marks on my doubt, too. Its stock is up 123% in just six months. This past week the company became the world's second most valuable car maker behind Toyota Motor (TM), if we count only shares, not debt. And Patrick Hummel at UBS published the most complimentary Sell recommendation I've seen. "We take a more bullish fundamental view on Tesla's technology and cost lead in hardware & software," he wrote, raising his price target from $160 to $410, versus the stock's recent $572.
Hummel expects 10% operating margins and $3 billion to $5 billion in annual free cash flow from 2022 on. But he thinks shares are "over-shooting right now."
Maybe. But I've been underestimating over-shooters for too long. That's why I'm trying to turn incautiously optimistic on fast-growers. It's difficult, so I need the Benevolent Order of Capitulating Bears for support. If you elect me Poobah, I have plenty of ideas. Frankly, I've been impressed with what the Shriners have done riding those little cars at charity events. I have a plan involving miniature Pelotons. That reminds me: Have you seen that this fiscal year's cash burn estimates for Peloton Interactive (PTON) have more than doubled since September, to $538 million?
Sorry. Old habit.
Corrections & Amplifications
UBS analyst Patrick Hummel expects Tesla to have 10% operating margins and $3 billion to $5 billion in annual free cash flow from 2022 on. An earlier version of this article incorrectly said the projections were from 2020 on.
Write to Jack Hough at jack.hough@barrons.com
(END) Dow Jones Newswires
January 26, 2020 10:32 ET (15:32 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
DJ把Netflix和Tesla搞錯了?歡迎來到屈從熊的仁慈教團。-Barrons.com
傑克·霍夫
我要成立一個支持小熊投降的組織。想象一下旅店的感覺,而不是12步的感覺。將有毛茸茸的耳朵帽子,一個是特斯拉(Tesla)的代碼(代碼:TSLA),另一個是Netflix(NFLX)。我們將贊助一支小聯盟球隊,而不是擔心它的基本面,並堅持認為它可以一路走下去。我們的祕密握手將是一個簡短的擠壓。
請注意,我自己的陰鬱只限於個別的高飛者。多年來,我一直看好市場,因為我很久以前就決定一直猜測。三分之二的時間我是對的,另外三分之一的時間我來得早,這是美聯儲的錯。
預測標準普爾500指數(S&P 500)的回報率也很容易。我從收益增長開始,今年的目標是10%。除以一半,估計削減。分紅加兩點。拿出一個點,以防價格/收益比率上升的情況有所緩解。現在再加上這個點,因為在利率這麼低的情況下,回到平均水平是在休殘疾假。
我的計算器表上寫的都是7%。誤差範圍為45點。
快速增長的公司是困難的部分。我對Netflix持謹慎態度,這是標準普爾500指數(S&P 500)過去10年來表現最好的一隻股票,它開始感覺到自己對喜悦的拋售評級。在過去的一週裏,它沒有達到對美國用户增長的預期,它的股價在一天之內就下跌了4%。我內心的,正在恢復的熊被誘惑咆哮的競爭日益加劇:本季度將是第一個完整的迪斯尼+,下個季度將看到NBC的孔雀和HBO MAX的推出。
但Netflix目前在美國以外擁有5個用户,每三個用户中就有5個,而且在最新的報告中,它輕鬆地超過了對國際增長的預期。它的競爭對手可能多年來都無法與之抗衡。管理層説,它在2019年燒掉的33億美元是最低點,今年它將消耗25億美元,“在緩慢地走向正自由現金流的道路上”。BMO Capital的股票負責人丹尼爾·薩爾蒙(Daniel Salmon)寫道,Netflix很快就會吸引價格合理增長的投資者的興趣。他看到了超過25%的上漲。
懷疑?我想辭職,謝謝。在牛市結束之前,我在Netflix上的評論將以兩場“歡呼”和“歡樂合唱團”(Glee)的表現來概括。請不要“迷失在太空”裂縫。
特斯拉也在我的懷疑中留下了腳印。它的股票在短短六個月內上漲了123%。過去一週,豐田成為僅次於豐田(Toyota)的全球第二大最有價值汽車製造商,如果我們只計算股票,而不計債務。瑞銀(UBS)的帕特里克·漢梅爾(PatrickHummel)也發表了我所見過的最他寫道:“我們對特斯拉的技術和硬件和軟件的成本領先持更樂觀的基本觀點。”他將目標價格從160美元提高到410美元,而近期的目標價格為572美元。
Hummel預計,從2020年起,其營業利潤率將達到10%,年自由現金流將達到30億至50億美元。但他認為,目前的股價“暴漲”。
也許吧。但我太久沒估計過高的槍手了。這就是為什麼我對快速種植者持謹慎樂觀態度的原因。這是困難的,所以我需要仁慈的秩序投降熊的支持。如果你選我做Poobah,我有很多想法。坦率地説,我對施林納一家在慈善活動中騎着這些小車所做的事印象深刻。我有個關於微型中上層的計劃。這提醒了我:你有沒有見過,本財政年度對PelotonInteractive(PTON)的現金消耗估計比去年9月翻了一倍多,達到5.38億美元?
抱歉的。老習慣。
閲讀更多街景:購買這些汽車芯片製造商,而不是特斯拉或通用汽車
致函Jack Hough@Barrons.com
(完)道瓊斯通訊社
2020年1月24日06:14(格林尼治時間11:14)
DJ把Netflix和Tesla股票搞錯了?歡迎來到屈從熊的仁慈教團。-Barrons.com
傑克·霍夫
我要成立一個支持小熊投降的組織。想象一下旅店的感覺,而不是12步的感覺。將有毛茸茸的耳朵帽子,一個是特斯拉(Tesla)的代碼(代碼:TSLA),另一個是Netflix(NFLX)。我們將贊助一支小聯盟球隊,而不是擔心它的基本面,並堅持認為它可以一路走下去。我們的祕密握手將是一個簡短的擠壓。
請注意,我自己的陰鬱只限於個別的高飛者。多年來,我一直看好市場,因為我很久以前就決定一直猜測。三分之二的時間我是對的,另外三分之一的時間我來得早,這是美聯儲的錯。
預測標準普爾500指數(S&P 500)的回報率也很容易。我從收益增長開始,今年的目標是10%。除以一半,估計削減。分紅加兩點。拿出一個點,以防價格/收益比率上升的情況有所緩解。現在再加上這個點,因為在利率這麼低的情況下,回到平均水平是在休殘疾假。
我的計算器表上寫的都是7%。誤差範圍為45點。
快速增長的公司是困難的部分。我對Netflix持謹慎態度,這是標準普爾500指數(S&P 500)過去10年來表現最好的一隻股票,它開始感覺到自己對喜悦的拋售評級。在過去的一週裏,它沒有達到對美國用户增長的預期,它的股價在一天之內就下跌了4%。我內心的,正在恢復的熊被誘惑咆哮的競爭日益加劇:本季度將是第一個完整的迪斯尼+,下個季度將看到NBC的孔雀和HBO MAX的推出。
但Netflix目前在美國以外擁有超過5名用户,每3名用户中就有一名用户。在最新的報告中,Netflix輕鬆超過了國際增長預期。它的競爭對手可能多年來都無法與之抗衡。管理層説,它在2019年燒掉的33億美元是最低點,今年它將消耗25億美元,“在緩慢地走向正自由現金流的道路上”。BMO Capital的股票負責人丹尼爾·薩爾蒙(Daniel Salmon)寫道,Netflix很快就會吸引價格合理增長的投資者的興趣。他看到了超過25%的上漲。
懷疑?我想辭職,謝謝。在牛市結束之前,我在Netflix上的評論將以兩場“歡呼”和“歡樂合唱團”(Glee)的表現來概括。請不要“迷失在太空”裂縫。
特斯拉也在我的懷疑中留下了腳印。它的股票在短短六個月內就上漲了123%。過去一週,豐田成為僅次於豐田汽車(ToyotaMotor)的全球第二大汽車製造商,如果我們只計算股票,而不是債務。瑞銀(UBS)的帕特里克·漢梅爾(PatrickHummel)也發表了我所見過的最他寫道:“我們對特斯拉的技術和硬件和軟件的成本領先持更樂觀的基本觀點。”他將目標價格從160美元提高到410美元,而近期的目標價格為572美元。
Hummel預計,從2022年開始,其營業利潤率將達到10%,年自由現金流將達到30億至50億美元。但他認為,目前的股價“暴漲”。
也許吧。但我太久沒估計過高的槍手了。這就是為什麼我對快速種植者持謹慎樂觀態度的原因。這是困難的,所以我需要仁慈的秩序投降熊的支持。如果你選我做Poobah,我有很多想法。坦率地説,我對施林納一家在慈善活動中騎着這些小車所做的事印象深刻。我有個關於微型中上層的計劃。這提醒了我:你有沒有見過,本財政年度對PelotonInteractive(PTON)的現金消耗估計比去年9月翻了一倍多,達到5.38億美元?
抱歉的。老習慣。
校正與放大
瑞銀(UBS)分析師帕特里克·漢梅爾(PatrickHummel)預計,從2022年起,特斯拉的營業利潤率將達到10%,年自由現金流將達到30億至50億美元。這篇文章的早期版本錯誤地説,這些預測是從2020年開始的。
致函Jack Hough@Barrons.com
(完)道瓊斯通訊社
2020年1月26日10:32(格林尼治時間15:32)
版權(C)2020 DowJones&Company,Inc.