Okay folks, I want to give you a violent update on the market and place, and then I would like to discuss one particular stock that's down about 63 year-to-date half of which happened today. Is this a buy? Well, I'll give you my thoughts and breakdown in terms of numbers. Okay, Madame Adergator finally turning into a heartbreaker. After weeks and weeks of holding retention and making higher highs, she loses not just the hard-fought battle for the Sevens, but also the six.

And yeah folks, unfortunately, the five They say hope dies last. But boy was it a rough day for this little lovely outer Gator. One of the reasons that I said it would be so crucial for Adder to be able to hold at least the 5 battleground is because if you want a bigger breakout this week, the main thesis for a Gamma squeeze is the most concentrated low probability options expiring in the money. But today, the five dollar strike price is sadly no longer in the money.

She's really a heartbreaker, isn't she? and the moon shots to other concentrated levels at six, six, Five, and Seven, and even all the way up to eight are even farther out of the money. which is unfortunate. And it does bother me that after put up basically no fight at all to get back under five, fifty, and five, it just blew right through them. It's like all the blood, sweat, and tears that got this to five and six and seven didn't mean anything, which signals a crisis of confidence.

Sure, a short interest did increase today, which indicates dumping of shares trying to scare out holders, but it's clear as day that you saw a combination of profit taking and panic selling. today. people who were deeply profitable in their position wanted to lock that in and you saw a cascading effect of people seeing that selling pressure and then writing that. momentum and then shorts probably also accelerated the trend, which would have been fine if it held five.

But no, it just couldn't do it. And just yesterday I was saying if you broke back down below the fives and into four, you would be in a much weaker setup because you'd have to take a lot more effort in order to actually get that momentum restarted. Once confidence is lost, it's very, very difficult to rebuild and as a stock starts dropping, the other edge of the sword is that interest in that stock drops as well, which makes it harder to bring in more capital. and you could see Atra's already falling from the list.

But we have seen this a few times in this overall uptrend with Atra and it didn't necessarily turn around the trend. The one positive I can see at this point is the new Battleground seems to be for the 450 region and not the four dollar support level. I was afraid yesterday when we were talking about the bear Case scenario that it would just tank and hit down into four and then you'd hold that previous support level. But the fact that we're holding some of the previous run at least means that you get some retaining power.

see what she does tomorrow and into Friday. If it does manage to retake the fives and sixes, that would be a big surprise to the short sellers in the options chain and can get alligator back into the game even if you don't get a gamma squeeze. The higher this goes into close this weekend, the more likely it is that this play becomes relevant for the upcoming weeks as well. Okay, in terms of briefing plays, one that was exciting was Crxt.

We briefed on it about 30 minutes prior to market open at 170 ish a share and had a nice run to 394 which is more than a double before it broke back down below our blue price rank. that's the May line and sold off the rest of the day. Now, the reason that I briefed on it was because you had this super small cap company seeing an abnormal spike in volume in the pre-market and you had huge excitement and speculation over a big catalyst that's coming in the upcoming days. A Big Data presentation.

This is a biotech company. Data presentations on their pipeline and pipeline success can give a lot of analyst coverage to these stocks and cause them to have rallies, which means that the pre-anticipatory run to that also tends to be very, very juicy. Now in terms of when this is happening, April 23rd is the main day, but the overall biotech meeting they are presenting at really starts tomorrow. So I did see that opportunity for a pre-anticipatory run today, and it did do said pre-anticipatory run.

Alv Aur was another Fda played that I liked. We briefed on it about 30 minutes prior to market open at like 672-ish and it ran to 851 before breaking below our price ranked Blue Sma and never really coming back. This one I thought would have a little bit more juice in it. Unfortunately, it did.

not. One thing to note here is that a lot of catalysts, some of the biggest catalysts are pumping those first couple of hours of market open and then people are going and taking profits. So if you don't have a clear entry and exit plan, you're probably just going to be holding it, you're going to be up, and then you're going to be down massively. But on the flip side, just because something does not rally right and open and instead Tanks doesn't mean that you're not going to see rebound rallies or residual rallies later on in the day.

Brqs was an example of a ticker that did just that. But anyways, folks, here is the full list of this morning's briefing. Obviously the goal of Zip Trader U is to give you lessons and strategies to train you to be a fierce warrior in the dirty battlefield of the stock Market and the briefings give us an opportunity to present specific battlefields that we see potential in and both bull and bear criteria for them so that you have standards. But at the end of the day it's still up to you to fight nobody but you is going to go into battle.

We can provide resources, we can provide strategies, we can provide a foundation and hopefully all those things will make you a better soldier. but it's still you out there on the battlefield. That's something that you must accept before you join us in order to get the most out of this program. But if you do want to join us, make sure to do that before the coupon code in the description below expires and prices go up.

Okay, Main Entree: Netflix So October 29th: Netflix trades at 690 dollars a share April 20th or 420. As the kids say, Netflix trades at 222 a ship. This is a drop that you'd see very commonly in the small cap or mid cap growth sector, but definitely not the big mega cap sector. This was a huge slap and dare I say spank in the face and rear end to wall street institutions who have overcrowded into mega cap stocks like Netflix.

In fact, 81 of Netflix is institutionally owned, and as of today, you've got everyone and their mother bailing on it with huge downgrades. It's funny how that works. a lot of the biggest, most bullish analysts are now some of the biggest bears. Bank of America downgraded their price target from 605 to 300, Jp Morgan 605 to 300 as well Wells Fargo 600 to 300, Deutsche 465 to 300.

I mean, it's super crazy when you have some of these major major banks that like the stock all of a sudden going and cutting their price targets in half. What does that really mean? Well, it means this report was very, very unexpected. and Netflix has been the big dog for years. Woof! Despite encroaching competition from Hulu, Disney Paramount, Amazon Prime, your neighbor Susan that likes to scream and dance loudly while still.

despite all that competition, a lot of Wall Street expected Netflix to continue being the Big Dog The Big Kahuna, And as of February 2022, they still dominate in terms of total U.s Tv time, with 6.4 percent going to Netflix an increase of 0.4 from May 2021. So what's up with this beatdown? Senior Charlie Charleston Well, you look over at this data table hither. if you're looking at revenue on a quarterly basis, you certainly had a slowdown, but it's up almost 10. Year-over-year operating margin is up from 8.2 percent in Q4 to 25.1 percent in Q1.

Diluted Eps doubled quarter over quarter projections are certainly a little bit slow for Q2 forecasting, but still relative growth. Nothing that on the surface would warrant a 60 plus drop, right? Well, then it goes down to global streaming paid memberships, and net additions. You see a drop in Q1 of 2022 and a forecasted drop of negative two percent in Q2. Now, people obviously knew that growth was slow in Netflix after the pandemic restrictions loosened and people were spending less time at the home.

But the fact of the matter is that a lot of people are still expecting growth. But at this point we're not seeing growth. we're seeing reduction. and this is scaring a lot of people thinking the Big Kahuna in the streaming niche is about to get its crown ripped off it soon.

and it's really Netflix's crown to loose. Many of the up-and-coming competitors from the last few years have the benefit of being much smaller and easier to scale and have much higher growth rates. whereas Netflix already dominated the market, so it's much harder to grow at the same pace once you've already gotten most of the pie. That's pretty much the Netflix story in the Us market, not so much trying to expand dramatically more and more customers, but rather trying to maintain the ones they have and better monetize them.

Netflix's expansion could really come from foreign markets, but more on that later. Why are they losing subscribers? Well, one big reason is their emerging markets exposure, especially in Russia and Eastern Europe. Quote: The suspension of our service in Russia and winding down of all Russian paid memberships resulted in a negative 0.7 million impact on paid net additions. Excluding this impact, paid net editions would have totaled plus 0.5 million.

If you exclude that loss of Russians, you would have not only not lost any members, but you actually would have added 500 000 0.5 million. So you could certainly blame Russia for a big part of that drop. But these slowing down growth factors can certainly be forgiven. Hey, Pandemic restrictions.

Easy and everybody knew that was going to happen eventually. Geopolitical tensions in Europe? hey, that was one of those Black Swan events. Two things that you can't really blame Netflix for or knock down its long-term value. But what investors really have to worry about is that C word competition.

They have to fight their competition in their main growth opportunity areas, which is number one in expanding into foreign markets and dominating those foreign markets, and number two holding on to domination in the U.s market, figuring out how to better monetize those members via cracking down on account sharing or new ads, or raising prices or increasing retention time. Overall, so I like numbers, so I wanted to run a few different situations on Netflix and my projections moving forward to analyze whether or not it's a good deal. Netflix had a 35 growth rate from 2017 to 2018, then 27, then 24. Then it dropped all the way down to 6.81 as we moved out of the pandemic.

So I went through and looked at 2017 through 2021's revenue. I averaged out the growth rates and factored in a deceleration of the average at a rate of 65 just to get a rough estimate of where growth rates would average out at. To get a broader feel for the trend, came up with about 8.18 average doubt yearly growth, which corresponds to a fair value multiple of about 3.51 If you're in zip trader, you and you have the template. You know that I calculate my fair value multiples by taking the company's expected revenue growth rate and dividing it by the S P 500 average and then multiplying it by the average S P 500 multiple.

The idea is that you get a rough estimate on adequate valuation for each level of business growth. And essentially, if you're playing with a growth rate of 8.18 the market is already adequately pricing in these numbers. If you're at 28.8 billion in sales, you're corresponding to a price target at 221. Right now, Netflix is trading at 223..

So you're already adequately priced for this year. If you're at 31 billion in 2023, you're corresponding to price targets at 238. But if you're looking to buy the dip on this with an estimated growth rate at say, 8.18 percent, the numbers really only start making sense if you're looking out to 2025 or your price target is at 276.. And even then it's not super incredible growth, right? Your capital may be better used elsewhere, but where it gets a little bit more interesting is when you are playing around with a stronger comeback for Netflix, where you get growth rates that are lower than original estimates prior to all these downgrades from the major banks, but are still very solid and show a lot of progress and I would say that's just under 12.

I plugged that into the zip trader you template formula and I came out with about 11.69 There's many ways to skin a cat. This is just my way of doing it, and if you think that Netflix is going to be able to outperform most of its competition, or at least relatively dominate, dramatically reduce the amount of shared accounts, introduce ads, and overall strongly progress into foreign markets. While you could certainly make an argument to see these numbers being hit averaged out in the upcoming years, which case, you're looking at a price target as high as 326 by the end of 2022 and all the way up to 448 by the end of 2025., now, this would be a good buy if you agreed with these numbers. Keep in mind here, in order for these price targets to be hit, you actually have to have Netflix showing and reporting quarterly and quarter over quarter progress so that markets can do the math and say, okay, well, these are what the growth rates are probably going to look like if we continue on to this trend.

Right now, the markets are doing the math and saying okay, growth is going to go a lot slower than we had expected and I would almost argue that at this point we just don't have enough information in terms of how successful they're going to be at reversing this trend. I think giving Netflix another quarter or so would be very, very appropriate. You may end up getting a much better price and you'll get more data in terms of how successful their strategies are. So I mean right now, if you're going to value this, I would say you'd have to value it based on the 8.18 revenue rate.

And at that price, it's not necessarily a bad deal and you're not necessarily going to lose a ton of money if you buy and hold it for five years. You'd probably make a decent amount, but I would say probably best to wait because I think you might get a much better opportunity down the road. or at least we'll see better data in terms of whether they're being successful at scaling up their operations again, getting new subscribers, introducing ads, opening into new markets, so on, and so forth. Anyways, folks that caps off today's video.

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