Off The Charts: Netflix Inc.

For his “Off The Charts” segment, Cramer went up against his colleague at TheStreet.com, Dan FItzpatrick over the chart of Netflix Inc. (NASDAQ:NFLX).”Netflix is the company that just won’t die,” Cramer said. Shares of Netflix are up 21% since Cramer’s last sell call on Aug. 20 when the stock was trading at $44.98. According to Fitzpatrick, the monthly stock chart for NFLX shows that $40, which had been resistance, is now becoming support, and the stock could move up to as high as $70 a share. On the fundamental side, Cramer said things look fabulous and the company is reporting incredible growth. Netflix grew its subscriber base by 28%, as a result of falling video stores and the rise if Internet video streaming. Cramer mentioned that kind of growth is on par with Google (GOOG) and Apple Inc. (NASDAQ:AAPL). On Monday the company also announced a new deal to rent movies through Sony’s (SNE) PlayStation 3. Netflix said the new deal could add 350,00 new subscribers. Cramer thinks that estimate might be too low given the fact that a similar deal with Xbox brought in 1 million new customers. Keep in mind, the PS3’s user base is 10 million people and there’s potential for future deals with Nintendo’s Wii as well. Cramer told viewers the Netflix model of low prices and free Internet streaming movies is proving to be a winner. The company reported that subscriber growth rose 28% vs. a year ago, net income soared 48% from its previous year and earnings per share came in at 58% higher than the same period last year. The stock is up 81% year-to-date, and shares trade at 21 times earnings. Cramer said that’s cheap considering that earnings should grow at a rate of 18.6% next year. He mentioned that growth rate might be low because Netflix has a history of better-than-expected quarters. “Netflix is unstoppable,” Cramer said, “and it is really time we acknowledged it.” Join the fastest growing community of small cap investors at Stockhideout.com

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