Elon Musk’s Space Exploration Technologies (NASDAQ: SPCX) went public in June. Investors were initially very optimistic about the company’s space transportation, satellite internet connectivity, and artificial intelligence businesses, so they piled into its stock, which sent it soaring to a peak of $225. However, it has since plummeted by 34% and closed at $148.68 last Friday, Sept. 25.
But SpaceX is still expensive. Based on the company’s hefty market capitalization of $2.02 trillion and its trailing-12-month revenue of $23 billion, its stock is trading at a price-to-sales (P/S) ratio of 87, making it 13 times as expensive as the technology-heavy Nasdaq-100 index.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
As a result, more downside might be ahead for SpaceX stock, so if I had $10,000 to invest today, I’d probably look elsewhere. I think Netflix (NASDAQ: NFLX) could perform better over the long term thanks to its robust streaming business and attractive valuation. Read on.
Netflix is on track to double its advertising revenue this year
Netflix operates the world’s largest streaming platform for movies and television shows. It has over 325 million paying subscribers, so it’s towering over its nearest rivals, Amazon Prime and Warner Bros. Discovery (the owner of HBO Max and Discovery+), which have 200 million and 140 million members, respectively.
Netflix typically outspends the competition each year when it comes to creating and licensing content, which helps attract new subscribers. But it also offers different membership tiers that appeal to people of different income levels, and this has been a core part of its success. For example, the company introduced an affordable subscription option in 2022 for just $8.99 per month, much lower than its Standard and Premium tiers, which cost $19.99 and $26.99 per month, respectively.
However, in exchange for the lower price, subscribers to the $8.99 tier will occasionally see ads during programming. It seems to be an acceptable trade-off for consumers, because this tier consistently accounts for over half of all new signups in countries where it’s available. It’s also a win for Netflix, because it can charge businesses more money for ad slots as the membership base grows larger, so each subscriber becomes more valuable over time.
