원문 보기
Miller Paul Sweeny live here on our Bloomberg Interactive Broker Studio we're streaming live on YouTube so go over and check that out little round table here on some earnings Dan IES senior Equity Analyst at wedbush Securities he joins us live here uh in his Bloomberg Interactive Broker Studio I'm not sure if he's going to State College uh this weekend not sure about that or they are they at high yeah we'll be going to Columbus Friday night oh you're going to Columbus OH nice I know I got a bar for you they uh you go in there order whatever you want food and drink if Penn State wins they pick up the tab wow I'm going to hook you up all right Keithan ranan she's definitely not going to Columbus Ohio uh because she's a professional she covers the media sector for Bloomberg intelligence and we want to talk about Netflix and and ESPN Dan knives let's start with you Tesla stock uh not liking what they're hearing from Elon Musk what was your takea away from the quarter uh for Tesla look it was a disaster conference call I mean because it was the street wanted to hear about pricing have the price Cuts ended what is the Outlook like going forward know instead this is really must be more of an economist you know obviously much more somber and I think investors leave with just more questions and answers in terms of this price war that you know we've talked about here a lot you know how long does it continue and obviously on Cyber truck that's going to be a huge vehicle relative to demand but definitely going to be an uphill battle from production perspective so I I got a million questions after that conference call but my first one is on the Cyber truck he uh contends that this is like a special project and that makes it extra difficult to produce why is that why isn't it just a normal truck I mean this could be like an F-150 competitor um it's so cool everybody wants it so many people put in pre-orders why is it so hard to make yeah from an engineering perspective it's very difficult so this one no one argues because it's a special shape because of the shape because of the materials in there as well as what they're trying to do from a technology perspective that's why why you talk about getting mass production look that's essentially why they built out Austin in terms of Giga but I do think must caution of course not the demand side but the production and to Matt's Point look that's always been the issue with Tesla it's about not about the demand story it's about the production ironically now for the first time demand sort of hit so equilibrium when it comes to supply all right so we've got uh Tesla down about uh 89% on the other side we got up 15% monster quarter Gea what did you hear on the conference call last night what did investors hear on the conference call last night that got them all hot and lathered here for Netflix yeah absolutely I mean it was a blockbuster quarter on all fronts uh Paul so absolutely the beat was it was not just a beat it was the magnitude of the beat and the story The Narrative is really clean now it's it's getting much much clearer um you know as far as the margin trajectory is concerned they they promised about 22 23% margins going going out in 2024 they promised you know subscriber momentum kind of extending into 2024 so really kind of firing on all cylinders if you will so Gea it seems like I mean you follow the whole media space it seems like Tesla's really pulling away from everybody else Netflix right Netflix thank you that Netflix is just pulling away from all the competitors maybe including Disney oh absolutely there's no doubt about it we already know that Netflix is way ahead of its Rivals not only when it comes to subscriber scale but also in terms of profitability remember this is the only company that is generating profits today Paul on its streaming business the rest of the space this company is going to generate about 78 billion dollars in profits this year the rest of the space including Disney Warner Brothers you know a Paramount all of them collectively will uh throw out about 8 to n billion dollar in streaming losses um so obviously when it comes to profitability when it comes to operating leverage there is no doubt that Netflix is the clear winner they are the dominant player but what was the biggest surprise was the fact that they they're just throwing out tons of free cash flow so this was you know a stock that we used to kind of almost Mock and ridicule talking about you know you know3 and half billion dollars in cash burn this year they're putting out $6.5 billion doar of free cash flow so this is yeah yeah this is a free cash flow machine and and not just that they committed to10 billion in buyback so as you kind of look you know at them shrinking that float look at EPS growth I mean it's going to be in the 30% range for the next few years and that is really huge in kind of this media landscape right now I mean I I my takeaway from our screen time conference last week was that uh Netflix is the boss of everything I mean if I were uh buying stocks I would have loaded up after I saw did you watch Harry Styles interviewing Ted Sandos I mean Lucas Shaw interviewing Ted Sandos last week I thought it was that guy came off like an absolute boss they're doing everything right they are look and you know I I think the thing here it's all not just about content you think about the competition what was coming from Disney they've now taken a step back and you look at that conference with that was a flex to muscles especially when you look at free cash flow you if you look at Netflix versus Tesla just to take those to last night it's not necessarily about the results it's also if you look at the communication the street wants to understand what the path looks like in a very uncertain cloudy Market Gea what's the headwind what's the big risk for Ted and flicks right now they seem to be getting everything right so the one concern I think that kind of is still kind of lingering a little bit is this whole Revenue growth re acceleration I mean they've got all the levers in place but arpu has been under pressured a little bit we saw arpu decline a little bit in the third qu average revenue per user yes yes average revenue per user um so that has become like the really big metric now to kind of gauge the success in the streaming world they did of course caution to that um they said it's going to be a little bit flat but then again we have price increases that are going into effect we have the ad business that's going to take off so as we kind of look to 2024 you know everything is in place for that that metric to kind of ramp up pretty significantly as well so right now they're getting everything right hey Dan my big question on EVS in general and I just purchased a new vehicle going back to Tesla now we're going back to Tesla it's kind of hard to keep track well that's why these are two very different companies I know but this very they're both ripping stocks people these are ones that are most RI Tesla getting killed today right Netflix is up 15% y Tesla is down 8.7 but for me the big issue having just purchased a new car BMW X3 he loves the X3 love the X3 although I have like 12 miles on it I'm just walking back and forth to the train every day um is and demand I I really have questions about what is the real demand out there in America for EVS like I'm thinking beyond the rich Beyond like a second or third car is there the political angle here like I think half the country will never buy an EV look I mean you're starting to get into a debate around what the demand curve looks like but ultimately price is so important if you look go back to traditionally Tesla 75 80 85,000 now even with the the tax credits 35 40,000 depending on what state you live in but it does also you talk about the Battle from the Beltway and what's happening here even with UAW and what's happened in Detroit with with jam and Ford it's all price driven 3% of automobiles in the US are EVS today so we believe that goes 10 12% there's going to be massive winners but it also comes down to price especially in this macra I mean as long as you know President Biden is going to pay me he's basically he's borrow money from my kids and my grandkids to pay me to buy an EV um I'm interested but I want the Cyber truck that's what that's the one I want exactly and Miller's going to have the Cyber truck while watching Netflix in full self-driving in 3 four years hey GE another big day in the world of media yesterday was or in the past couple days Disney for the first time ever released Financial results for ESPN and my takeaway was two things one uh their profit margins are well there's still a lot of cash flow almost $3 billion dollar of ebit but it declined big time and it's nowhere near the number it used to be what is ESPN or what is Disney Company can do with ESPN yeah that's the big big question Paul and I mean one of the reasons that they kind of broke this out as a standalone unit was because they really kind of wanted to show you know potentially future investors if they're planning to sell a stake or if they're planning to spin it off you know what the financials kind of look like um but obviously you know the Top Line actually looks pretty stable at $16 billion it it's really the the profit margins as you rightly pointed out I mean you look at the traditional Cable business it's about 30 35% margins you look at ESPN's margins it's 15% this year so that is a little bit concerning and obviously it is only going to go lower given that you know Sports rights fees are increasing astronomically so they really need to do something with this asset we know that they need to do it fast the question is do they sell it do they do they actually sell it to Apple as has kind of been said all uh and you know or do they you know spin it out uh again we'll we'll have to wait and watch but they are definitely I kind of feel like I have to apologize to Gea because the 25 years I had covered in the media industry were the Golden Years everybody made money what I've left to Gea is just a hodge podge I don't know what's going on out there Gea what's the I mean can you get any investor out there to say I want to overweight media no not at all um I mean everything is down in the dumps right now other than of course Netflix um but we'll have to wait and watch what happens with Disney I think they have a great collection of assets they're trying to do everything that they can but Bob Iger obviously has a lot of challenges ahead of him including naming a successor maybe yeah what it seems like that um is one of his worries but others are just as pressing I'll be interested to see if the leagues come in and get a piece of ESPN is that still on the table Dan what do you think uh uh could could like the NFL um and some other professional sports leagues come in and take a big chunk of it look we believe this is ultimately going to lead Apple to acquiring ESPN oh you thinkle it's all Martin our thesis has been Laura talked about says all of Disney so Laura talks about Disney which you know obviously makes sense there too but we believe it's really about ESPN the live streaming asset you look what app with with you know MLS and Messi I think they recognize in terms of cook and catino even though m&a is obviously not their sweet spot ESPN's a unique asset it'll be a better buy than beats right and that was three and a half billion how much is ESPN going to cost I mean we think 40 to 45 billion is probably what would be the price tag but then when you look at Disney you know as this conversation talking about some of the parts you sell disy and that's why there's more pressure and Iger in the board what's Disney worth like 150 let me pull it up right now yes Disney is currently in market cap terms worth 150 3.7 billion we think about third of that value so if if they get rid of uh if say they let's say they get $50 billion for ESPN Gea what is Disney Then worth if they sell ESPN for $50 billion that is actually a really really high multiple so you know if you kind of look where cable stocks are trading right now they're trading at about 7 and a half times eida at 7 and a half times eida ESPN would be worth about anywhere from about 22 to 25 billion so it'll be interesting it'll be interesting if they can get that 15x multiple that that would actually be awesome but again you have to kind of kind of look at at at Disney's you know really bread and butter of the business that is the parks business that is going to you know just a few years ago Parks used to bring in only about 30 35% of operating income this year it's it's bringing in about 75% of operating income at 10 billion y so you know Disney really is Parks right now and Parks itself should be worth I think 200 billion nice I want to uh I just want to Dan finally get back to Tesla in terms of production and the gigafactory um there was a lot of talk on the call yesterday about um whether musk could do a lot of his production in Texas um where where are they going to build the most of their you know expansion or do does their expansion not look as fruitful as it did you know before this call expansion is going to be in Austin broader Texas as well as in China I mean they're they're focusing more and more away from California obviously their cour and away from Monteray away from mon yeah and look and fundamentally just speaks to mathematically economically speaking it's Texas talk about the Mexico plan that they're going to you know ultimately start to build out but it's really China capacity right now is not the issue it's about the price Cuts keep cutting prices that's a bad spiral yep all right Dan Ives senior Analyst at W bush Securities covering all that fun stuff in Tech and Gea ranganathan uh she is the media analist at Bloomberg intelligence based down in Princeton and Dan heading off to Columbus Ohio to see undefeated Pate of Ohio take on undefeated the Ohio State University Ohio State huge
Comments 0