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Baidu Inc (ADR) (NASDAQ:$BIDU): Continue to Grow

BY JASON SELIGMAN

Baidu Inc (ADR) (NASDAQ:BIDU)(TREND ANALYSISstock closed up 6.03% to $217.97 on heavy volume in Monday’s trading session, as shares of the company surged in the final minutes of trading before being added to the MSCI tomorrow.

Baidu is among 14 China-based U.S. traded stocks that will be added to index provider MSCI’s emerging markets index on Tuesday.

Foreign-listed stocks had been forbidden from the index until now, according to Reuters.

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Baidu Inc (ADR) (NASDAQ:BIDU) stock is currently trading 9.93% below its 52-week-high, 117.97% above its 52-week-low. The 1-year stock price history is in the range of $100 – $242. Baidu Inc (ADR) (BIDU) has a price to earnings ratio of 41.11 versus Technology sector average of 21.06. BIDU stock price has underperformed the Nasdaq by 15.1%. The Web Portals & ISP company is currently valued at $75.34 billion and its share price closed the last trading session at $217.97. The stock has a 50-day moving average of $180.6 and a 200-day moving average of $177.26.

Baidu Inc (ADR) (BIDU) current short interest stands at 7.68 million shares. It has decreased by 2% from the same period of last month. Around 3% of the company’s shares, which are float, are short sold. With a 10-days average volume of 3.97 million shares, the number of days required to cover the short positions stand at 2 days.

BIDU reported last quarter earnings on October 29. The Web Portals & ISP company announced earnings per share of $1.25 against a consensus Street estimate of $1.2, beating the average estimate by $0.05. This corresponds to a decrease of $0.04 compared to the same quarter of the previous fiscal year.

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There are currently thirty-three analysts that cover Baidu Inc (ADR) stock. Of those thirty-three, twenty-two have a Buy rating, ten have a Hold rating and one has a Sell rating. On a consensus basis this yields to an Overweight rating. The consensus target price stands at $209.28.

A recent analyst activity consisted of Piper Jaffray reiterating their Overweight stance on October 30. Piper Jaffray increased their price target on BIDU from $210 to $220. This corresponds to a 0.93% upside from the last closing price. On the date of report, the stock closed at $187.47.

Daiwa Securities downgraded their rating to Underperform on October 7. On the date of report, the stock closed at $144.77.

Another research firm was Summit Research who downgraded their Buy rating to Hold on September 30. Summit Research decreased price target from $205 to $150. This translates to a 31.18% downside from the last closing price. On the date of report, the stock closed at $137.41.

Company snapshot

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Bank of America Corp ($BAC): Approaching Rate Hike

By Troy Kuhn

For the first time in nearly a decade, the US economy could finally be shedding the weight of a near-zero interest rate policy. As we inch closer to the final Federal Reserve meeting for 2015, the notion of a rate hike appears to be materializing into reality. Yesterday, chairman of the Federal Reserve, Janet Yellen acknowledged a strengthening US economy; a fundamental prerequisite for the adoption of higher rates. Ms. Yellen’s speech at the Economic Club of Washington affirms the rising possibility of a December liftoff. According to Fed Fund’s futures, the current implied probability of a rate hike in December stands at 74%, presenting great potential for return to the US banking sector.

Banks
For almost a decade, the US banking sector has struggled to lift up its income stream, as a low interest rate environment played a substantial drag on the sector’s capacity to generate earnings. Instead, most banks have resorted to trimming high costs, to seek shelter from low interest rate environment. However, the roughly 10-year long drag might soon be a notion of the past, as Federal Open Market Committee members gather for a scheduled meeting on 15-16 December.

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Ms. Yellen explains: “The economy has come a long way toward the FOMC’s objectives of maximum employment and price stability. When the Committee begins to normalize the stance of policy, doing so will be a testament, also, to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession. In that sense, it is a day that I expect we all are looking forward to.”

Banking stocks have increasingly adopted an upward trajectory in anticipation of a December liftoff. For instance, Bank of America Corp (NYSE:BAC) stock has gained more than 11% in market value in the past three months. Other banking stocks have followed a similar trend in the respective duration, as the XLF Select Sector Index shows an incline of more than 6%.

The rise in market values can be attributed to rising anticipations of a December liftoff. As the US economy strengthens to depict significant improvements in labor force, the prospects of bolstered interest rate environment appear increasingly viable.

US banks have a particularly heavy focus on their domestic market. This means that a rate-hike is poised to benefit the sector considerably as banks will be in position to pass on higher rates to employees with considerable ease. In turn, the sector is also best suited to delay passing on the higher rate to its savers. Needless to say, this presents a win-win situation for US banks from both the borrowing and the saving channels.

Importantly, a major chunk of the benefit to foreign banks with operations in the US, is to be channeled in the form of higher yields from US Treasury bills and other US debt. Global banks prefer and hold significant portions of US debt due to its high liquidity status, reports the Financial Times.

Moreover, an elevated interest rate will ease the erosion of net interest spreads at banks. After climbing to a peak in 2010, net interest margin has come under considerable downward pressure. The spread is essentially the difference between what is paid for funding and what comes in via lending. In the past, a low interest rate environment has cut significant proportion of the bank margins. Therefore, among other things, banks are attaching significant bullish momentum to a theoretical rise in income.

In a note to clients, Morgan Stanley analysts explain: “One of the most important drivers of bank earnings is higher interest rates, particularly for the US and Asian banks. Higher rates drive higher net interest income and thus affect bank stock valuations.”

Fundamentally, banks with a higher proportion of deposits versus outstanding loans are subject to gain the most from a rate hike. Most analysts are of the view that Bank of America is the most rate-sensitive bank, and hence, in an ideal position, should reap significant gains from a rate hike.

On a slightly different note, US banks could also benefit from higher rates via a relatively indirect path. Rising rates are an indicator of a strengthening economy. Therefore, positive investor sentiment will help further elevate economic activity. In turn, the raised economic activity will benefit banks, as an increased proportion of businesses resort to banks for their financial needs.

Macro-economic Factors
Considering the recent development in the labor market, it is safe to say that the economy is strengthening. In November, employers appeared keener on hiring new employees. Additionally, wage growth also climbed during the third quarter, signaling advancement in the US economy. A strong labor force allows for higher interest rates to be absorbed more smoothly, hence heightening the prospect of a December liftoff.

Another macroeconomic indicator that helps in determining the FOMC meeting’s outcome is in relation to the US consumer price index. The Federal Reserve has consistently played the significance of a 2% inflation market to ease the mechanisms of a high interest rate environment. For the month of October, consumer price index reported an incline of 0.02, a leap after two consistent months of staying in the red.

An important point to realize here is that it is difficult for inflation to reach the required mark without the introduction of a rate hike. Even if consumer price index appears to be rising steadily, overall inflation rate will only reach the acceptable mark once monetary tightening is introduced. In fact, the Federal Reserve Chairman specified yesterday that even if the upcoming labor market data depicts a slack, the December liftoff might still be a definite possibility.

Although a liftoff appears imminent at this stage, investors and markets should be advised that the hike is expected to be a steady process, to say the least. The Federal Reserve will be increasing interest rates at a considerably steady pace to ensure eased absorption into markets. Among other things, the case of emerging markets continues to play a significant role in the Federal Reserve’s decision making process.

In the long run, the Federal Reserve expects interest rates to reach a peak of 3.5%. This is much lower than the average federal fund rates seen in the past.

Sell Side View
In the light of a prospective rate hike, majority of analysts have upgraded their view on banking stocks, including Bank of America stock. Out of a total of 38 analysts polled by Bloomberg, 27 rate Bank of America stock a Buy, nine suggest a Hold, while two analysts recommend a Sell. The stock’s 12-month consensus target price is $18.90, presenting an upside of more than 7% over the last quoted price.
Of the recent sell-side updates on Bank of America stock, analyst Glenn P Schorr of Evercore ISI recommends a Buy, with an estimated target price of $19. The most optimistic outlook was released by analyst Richard X Bove Sr of Rafferty Capital Markets, rating the stock a Buy, with an estimated target price of $21.

 

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After Today’s Bearish Options Activity, Is iShares NASDAQ Biotechnology Index (ETF)’s $IBB Near-Term Analysis Positive?

IN STOCK OPTIONS NEWS

In today’s session iShares NASDAQ Biotechnology Index (ETF) (IBB) recorded an unusually high (4,060) contracts volume of put trades. Someone, most probably a professional was a very active buyer of the January, 2016 put, expecting serious IBB decrease. With 4,060 contracts traded and 5339 open interest for the Jan, 16 contract, it seems this is a quite bearish bet. The option with symbol: IBB160115P00300000 closed last at: $4 or 17.6% up. The ETF decreased 1.95% or $6.64 during the last trading session, hitting $334.37. About 1.92 million shares traded hands. iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) has declined 2.94% since April 28, 2015 and is downtrending. It has underperformed by 2.05% the S&P500

Shares Nasdaq Biotechnology ETF , formerly iShares Nasdaq Biotechnology Index Fund, is an exchange-traded fund (ETF). The ETF has a market cap of $8.60 billion. The Fund seeks investment results that correspond generally to the price and yield performance of the NASDAQ Biotechnology Index (the Index). It has 3.68 P/E ratio. The Index contains securities of NASDAQ listed companies that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals, which also meet other eligibility criteria determined by NASDAQ.

After Today's Bearish Options Activity, Is iShares NASDAQ Biotechnology Index (ETF)'s Near-Term Analysis Positive?

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Shares of Visa Inc. (NYSE: $V) Sees Large Outflow of Money

Shares of Visa Inc. (NYSE:V) Sees Large Outflow of Money

Shares of Visa Inc. (NYSE:V) traded 0.02 points or 0.03% higher at $79.86.The total intraday money flow for the shares came in at a disappointing $(-7.42) million. The total upticks amounted to $4.93 million and the total downticks were approximately $12.35 million, with the up/down ratio of 0.4. On a different note, the shares have seen 0.03% price change during the week.In a block trade which occurred during the day, the stock had an inflow of $0 million in upticks and an outflow of $6.57 million in downticks. The up/down ratio for the block was found to be 0. The net money flow for the block transaction was $(-6.57) million.

Visa

Visa Inc. has dropped 1.47% in the last five trading days, however, the shares have posted positive gains of 0.82% in the last 4 weeks.Visa Inc. is up 11.01% in the last 3-month period. Year-to-Date the stock performance stands at 21.38%.

In a different note, The Company has disclosed insider buying and selling activities to the Securities Exchange, Richey Ellen, officer (VICE CHAIR RISK & PUB POLICY) of Visa Inc., unloaded 4,785 shares at an average price of $277 on March 2, 2015. The total amount of the transaction was worth $1,325,445, according to the disclosed information with the Securities and Exchange Commission in a Form 4 filing. Currently the company Insiders own 0.18% of Visa Inc. shares according to the proxy statements. Institutional Investors own 80.78% of Visa Inc. shares.

Visa Inc. (NYSE:V) witnessed a decline in the market cap on Monday as its shares dropped 1.04% or 0.83 points. After the session commenced at $80.06, the stock reached the higher end at $80.13 while it hit a low of $78.96. With the volume soaring to 8,874,643 shares, the last trade was called at $79.01. The company has a 52-week high of $81.01. The company has a market cap of $174,734 million and there are 2,211,543,300 shares in outstanding. The 52-week low of the share price is $60.

Many analysts have commented on the company rating. Pacific Crest maintains its view on Visa Inc. (NYSE:V) according to the research report released by the firm to its investors. The shares have now been rated Overweight by the stock experts at the ratings house. Pacific Crest raises the price target from $76 per share to $80 per share on Visa Inc.. The rating by the firm was issued on November 3, 2015.

Visa Inc. (Visa) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and electronic payments. The Company operates in Payment Services. The Company operates processing networks VisaNet, which facilitates authorization, clearing and settlement of payment transactions worldwide. It also offers fraud protection for account holders and assured payment for merchants. The Company operates an open-loop payments network in which Visa connects and manages the exchange of information and values between: issuers, which includes financial institutions that issue Visa-branded cards or payment products to account holders, and acquirers, which includes financial institutions that contract with merchants to accept Visa-branded cards or payment products.

http://www.moneyflowindex.org/shares-of-visa-inc-nysev-sees-large-outflow-of-money-3/3200037/

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Large Inflow of Money Witnessed in Twitter, Inc.

Twitter, Inc. (NYSE:TWTR) had a weak trading session and its shares were last down at $25.4, down -0.35% or -1.36 points. The trading data also revealed that the total net flow stood at $42.26 million as the shares had $116.85 million in upticks but lost $74.6 million in downticks. The up/down ratio was 1.57. This data is particularly important for the traders and speculators alike as it could also be used to gauge the strength of the momentum in the shares. During the past week, the shares have seen a change of -1.36% in the shares.The block trade data suggests an inflow of $48.02 million in upticks and an outflow of $4.95 million in downticks. The up/down ratio for the block stood at 9.71. The net money flow for this transaction was recorded at $43.07.

Twitter,

Twitter, Inc. has lost 3.31% in the last five trading days and dropped 12.59% in the last 4 weeks.Twitter, Inc. has dropped 8.6% during the last 3-month period . Year-to-Date the stock performance stands at -29.19%.

On a different note, The Company has disclosed insider buying and selling activities to the Securities Exchange, Williams Evan Clark, director of Twitter, Inc., unloaded 37,600 shares at an average price of $25.32 on November 23, 2015. The total amount of the transaction was worth $952,032, according to the disclosed information with the Securities and Exchange Commission in a Form 4 filing. Currently the company Insiders own 7.82% of Twitter, Inc. shares according to the proxy statements. In the past twelve weeks, the net percent change held by company insiders has changed by -4.07% . Institutional Investors own 43.47% of Twitter, Inc. shares. During last six month period, the net percent change held by insiders has seen a change of -6.62%.

Twitter, Inc. (NYSE:TWTR) witnessed a decline in the market cap on Monday as its shares dropped 1.36% or 0.35 points. After the session commenced at $25.78, the stock reached the higher end at $25.82 while it hit a low of $25.06. With the volume soaring to 17,913,585 shares, the last trade was called at $25.4. The company has a 52-week high of $53.49. The company has a market cap of $17,347 million and there are 682,946,650 shares in outstanding. The 52-week low of the share price is $21.01.

Many analysts have commented on the company rating. Barclays maintains its view on Twitter, Inc. (NYSE:TWTR) according to the research report released by the firm to its investors. The shares have now been rated Equal-weight by the stock experts at the ratings house. Barclays lowers the price target from $40 per share to $33 per share on Twitter, Inc.. The rating by the firm was issued on October 28, 2015.

Twitter, Inc. (Twitter) is a global platform for public self-expression and conversation in real time. It is a real-time platform, where any user can create a Tweet and any user can follow other users.Viewers can see photos, videos and conversations directly in Tweets to get the whole story at a glance, and all in one place. It offers Twitter apps for phones, tablets and computers. It generates its advertising revenue primarily from the sale of its three Promoted Products: Promoted Tweets, Promoted Accounts and Promoted Trends. Its users include millions of people from around the world, as well as influential individuals and organizations, such as government officials, celebrities, athletes, journalists, sports teams, media outlets and brands. In April 2014, it acquired Gnip Inc. In June 2014, Twitter Inc acquired Namo Media Inc. Effective August 1, 2014, Twitter Inc acquired Lectorius Inc. In August 2014, New York REIT Inc. announced the acquisition of Twitters headquarters.

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Tesla Motors Inc (TSLA) Loses Autopilot Visionary to Alphabet Inc

Tesla Motors Inc (NASDAQ:TSLA) seems to have two major problems. The first problem is that it can’t seem to make its cars as fast as it sells them – you’ll have to wait for at least a year before you can get a Model X. The second problem is that the firm is having trouble hiring new engineers faster than it fires/loses them.  9to5Google reportsthat Alphabet Inc (NASDAQ:GOOG) auto has poached away the brain behind the creation of Tesla’s autopilot and a key player in ELon Musk’s SpaceX.

Tesla Motors Inc (NASDAQ:TSLA)

Tesla Motors cried out about its need for talent to work on its cars about two weeks ago. CEO Elon Musk, took to Twitter to throw open the next round of hiring spree at the firm. He noted that the firm wanted to hire experts in autopilot software as it tries to push the evolution of its driver-assist system to become fully autonomous car systems in the not too distant future. It was noted that Tesla Motors has also lost its fair share of talents to rivals such as Apple and more recently, Faraday Futures.

Robert Rose leaves Tesla Motors

News has it that Google has hired Robert Rose who was the brain behind the creation of Tesla Motors’ autopilot and a key player in Elon Musk’s SpaceX.

Related Story …   Alphabet Inc (GOOGL) Cancels Store Opening, Cuts Prices

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He spent 5 years working in SpaceX first Falcon 9 and Dragon flight and he rose to become the director of Flight Software before he joined the autopilot team at Tesla Motors Inc(NASDAQ:TSLA). He led the autopilot team to release v7.0 update. His position at Google is not yet defined but his LinkedIn profile says he is a “Software Engineer” at “Google Robotics”. Alphabet has been pushing its self-driving car project for a public debut by 2020.

From Tesla to Apple to Google, poaching talent is part of the game

To start with, the fastest route to creating the self-driving cars of the future will require full collaboration from all the key players in the market. Tesla Motors knows how to make EVs and it has decent autopilot features. Google has a fleet of full autonomous cars, but it doesn’t have a production plant to scale and it cars still drive slowly at 25mph. Apple is tight-lipped about what it has done in the space, but we can rightly posit that the firm has a handle on design and car infotainment systems.

Since all the players in the self-driving space have refused to work as a team officially; poaching workers  the best way to learn from one another without engaging in corporate espionage. Tesla Motors Inc (NASDAQ:TSLA) seems to make the loudest noise about the loss of its engineers to rival players in the self-driving car race. Truth be told, Tesla is as guilty of poaching key talent as the other firms are guilty of luring away its workers.  Apple steals workers from Tesla, Tesla poaches workers from Apple, and Google has a number of steals to its credit.

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Internet Ad Growth Is Surging, and Facebook Inc. Is the Big Winner

John-Erik Koslosky

jekoslosky

A report released in October by the Interactive Advertising Bureau shows digital advertising growing this year at a year-over-year rate of about 19% — the fastest growth rate in four years. This is a seemingly strong sign for publishers across the Web, but a closer look at the data leaves little doubt about which company is the biggest emerging winner across the digital space. It’s Facebook (NASDAQ:FB), and it’s likely coming at the expense of most everyone else.

While the 19% growth figure – which measured the first six months of 2015 against the first six of 2014 — is impressive, the gains were clearly being driven by a few areas where growth is exploding, and all of those areas are on terrain where Facebook has been staking major claims.

Mobile is exploding, still
Growth in mobile revenues, for example, rang in at some 56%. Mobile’s share of overall digital ad revenue also grew from 23% to 30% in just a year’s time. And mobile display advertising — arguably Facebook’s most dominant area over other big players like Alphabet‘s(NASDAQ:GOOG) (NASDAQ:GOOGL) Google — grew from 47% of the mobile space in the first half of 2014 to 52% a year later. Mobile search, meanwhile, lost ground, dropping from a 51% share of mobile ad revenue to 44%.

To date, mobile has been Facebook’s domain. The company reported 66% growth in mobile ad revenue last quarter, faster growth than IAB reported in mobile overall. Facebook made mobile its focus years ago, and that’s paying off today as it drives the company’s explosive growth.

What’s more, Facebook says its three popular mobile apps — Facebook, Messenger, and Instagram — combine to represent an average 46 minutes of use per day, per mobile user. If accurate, that would represent nearly a quarter of all mobile use. That’s likely why eMarketer expects Facebook to continue gobbling up share of the mobile ad market over the next few years, even as more companies make mobile their focus.

The social gathering is getting more crowded
The IAB-commissioned research, which was conducted by professional services firm PricewaterhouseCoopers, also showed 51% growth in advertising on social media, where Facebook is the single biggest player. Its $12.5 billion in 2014 revenue towered above the $1.4 billion brought in by Twitter and the $2.2 billion generated by LinkedIn.

On this front, however, Facebook’s growth may be trailing the industry overall. Over the first nine months of 2015, Facebook’s revenue came in about 40% higher than the prior year. Twitter, meanwhile, reported year-over-year revenue growth of 58% last quarter, while revenue growth at LinkedIn trailed Facebook’s at about 37% last quarter.

There are also fast-growing private businesses in the space, like Pinterest. According to a set of leaked documents, Pinterest expects its revenue to increase from less than $25 million in 2014 to $169 million this year — a growth rate of some 576%.

Growth will slow over time, but it’s a good example of how quickly a company can step into the space and start taking share. Facebook remains the dominant player. It may not be able to maintain its share, but with a market still growing at better than a 50% clip, it doesn’t have to.

The web video wars are just getting started
A third area of fast growth in the IAB report was in Web video, an area where Facebook has become increasingly focused. The IAB report pegged digital video revenue growth at about 39% for the first six months of 2015, as compared to the prior-year period.

Facebook is positioning itself to slug it out with Web video standard-bearer YouTube, owned by Alphabet. More than half a billion people now watch video posted to Facebook every day, the company reported this month. On the average day, more than 8 billion video clips are viewed on the social network, the company says.

But the company still operates in YouTube’s shadow in many ways. YouTube, after all, has developed a rich platform for video content and holds some significant advantages over Facebook, including the platform’s ability to keep viewers watching, clicking other videos that creators have uploaded to the site, rather than just watching an auto-loading clip and moving along.

Alphabet has not released a lot of hard numbers on YouTube to date, opting for more nebulous phrasing that it has “over a billion users” and that those users watch “hundreds of millions of hours” of video on the site each day. But Alphabet says YouTube’s user base continues to grow at a 40% annual rate.

Not dominant across the board, but…
Facebook has carved out a dominant position in mobile, which will serve as a springboard to growth in other areas, such as Web video. It will continue to play in these competitive spaces, and while it may lose share in some areas, its strong position in the fastest-growing areas highlighted in the IAB report — and its focus on innovation — should fuel continued growth.

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Tesla Motors Inc Moves Higher On Goldman Report

Despite the bearish reports we’ve had on Tesla Motors this week, the stock is moving higher today on the back of a report from Goldman Sachs which highlighted not only Tesla but other low carbon stocks. The firm named Tesla as one of its top picks in the area of green energy, which is in focus this week in Paris at the Global Climate Summit.

Shares of Tesla climbed by as much as 3.02% to $237.32 per share during afternoon trading hours today.

Tightening carbon regulations to boost Tesla stock

Goldman Sachs analysts highlighted four main areas in what they call “the carbon economy.” They are solar, wind, LEDs, and hybrids and electric vehicles. This week’s carbon summit in Paris will likely have a broad-based effect as lawmakers and regulators consider tightening restrictions on carbon production. Tesla is a direct beneficiary of what the Goldman team terms “grid connected vehicles.”

They note the continued tightening of restrictions on carbon emissions from vehicles has been driving and will continue to drive innovation in the space.

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NFLX Stock: Is Netflix, Inc. a $200 Stock?

Netflix, Inc. $200? It’s Possible

Jing Pan, B.Sc, MA

Investors of on-demand video streaming giant Netflix, Inc. (NASDAQ:NFLX) has been generously rewarded this year as NFLX’s stock price skyrocketed more than 150% in less than 11 months. Standing at $123.92 a share, Netflix stock is not cheap, especially when you look at its price-to-earnings (PE) multiple hovering over 300. However, despite its hefty price tag, some analysts are quite confident that the company’s bottom line would improve in the future.

Could NFLX Stock Hit $300.00?

Last month, RBC Capital Markets analyst Mark Mahaney reiterated his “Buy” rating on NFLX. The analyst said that Netflix’s international subscriber growth would continue its strong momentum and the long-term international penetration level could be around 30%. This suggests that Netflix could reach approximately 200 million global subscribers, roughly three times NFLX’s current subscribers.

Mahaney calculates that with average revenue per user (ARPU) of $11.00 and a 30% operating margin, NFLX could achieve $10.00 or more in earnings per share. Based on a market premium P/E multiple at 20X, Mahaney believes that NFLX stock has the ability to reach $200.00 per share within the next three to five years. (Source: “RBC Capital Pounds the Table on Netflix, Inc.,” Smarter Analyst, November 20, 2015.)

Are these estimates realistic? In recent months, international expansion has been driving Netflix’s user growth. In the second quarter of 2015, NFLX added 3.3 million total subscribers, with 2.4 million coming from outside of the U.S. In the third quarter, Netflix expanded its global subscribers by 3.62 million. Among the additions, 2.74 million came from overseas. (Source: “Q3 15 Letter to Shareholders,” Netflix, Inc., October 14, 2015.)

So, how can Netflix guarantee its success in markets it is yet to tap into? Well, according to a study by research company Global Web Index, Netflix already has tens of millions of viewers in countries where Netflix doesn’t offer its service. The study was based on a survey of virtual private network (VPN) users, who can bypass geographical restrictions on Internet content and access material that’s not technically available in their regions.

The survey found that 29% of global VPN users said they had used Netflix in the previous month. The highest percentages were in Canada and Mexico, where VPN users were likely to be accessing the American version of Netflix to watch shows that were available only on Netflix in the U.S.

The more interesting numbers are the high percentages in India and China: 32% for VPN users in India and 31% in China. Since Netflix was not available in those two countries, these numbers suggest that Netflix already had solid followings in those two potential markets. (Source: “29% of VPN Users Accessing Netflix,” Global Web Index, last accessed November 30, 2015.)

The company made its first foray into Asia by launching its on-demand video streaming service for Japan this September. Netflix also has plans for entering China, a country with a huge fan base for American TV shows such as House of Cards. Launching the service in China might not be easy, but Netflix has been exploring options to enter the most populous country in the world.

The Bottom Line on NFLX Stock

Netflix’s international expansion is well underway, with South Korea, Hong Kong, Taiwan, and Singapore scheduled to launch in early 2016. As the number of subscribers continues to grow, Mr. Mahaney’s $200.00 target price on NFLX stock is not that crazy.

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