🎯 Netflix is cheap

Welcome back to Trendline where I share top charts on investing & business trends.

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1) Is Netflix’s service underpriced? According to research firm MoffettNathanson, Netflix collects the smallest amount of revenue per hour spent viewing. While we are paying $0.83 per hour for Paramount+, we are spending just $0.36 per hour on Netflix. Given Netflix continues to add subscribers even as it raises prices, there may be some truth to this assertion, pointing to more opportunity left for Netflix to raise prices in future.

2) Waymo and Uber: One of Uber’s biggest bear case is rise of autonomous vehicles (AVs), such as Waymo, reducing the need for Uber’s services. However, it looks like Waymo sees Uber more as a partner than a competitor, using it for demand generation in markets in Phoenix and Atlanta.

AV’s will find it difficult (and costly) to recreate Uber’s core strengths of demand aggregation and vehicle utilization.

3) Shopify stays cheap as its rises: Shopify’s stock has soared ~200% in the last 2 years. However, its valuation multiple (Price/Sales) has stayed relatively low during this time. This is unlike the 2020-2022 rally when the stock price increase was also met with increase in valuation multiple. Multiple expansion, esp. if Shopify continues to grow 20%+ YoY, can fuel the stock price further.

4) Hollywood losing its shine: California has long been the heart of the US film industry, but a shift is underway. The Chart below shows % of film industry employees located in California - this number had hovered around 40% in 2010s but there has been a sharp decline since 2022, dropping to less than 30% in 2024. “This data square well with broad trends in the film industry: even well before the pandemic, states such as Georgia invested heavily in attracting film and TV productions, potentially challenging California’s dominance. The more recent acceleration downward could also reflect the general shift of employment and population away from California”

5) Return to Office: Covid-19 pandemic gave us work from home. However, companies have been steadily getting their employees back to office. According to Placer.AI (a company that tracks foot traffic), office visits are close to ~50% of Jan-2019 baseline, but the trend is tapering off late, pointing to a new normal, with arrangements such as hybrid work environments getting more common in companies.