Netflix (NFLX) soared $6.12 or 11% yesterday to $62.58 despite their 3Q results expected to be very weak due to the London Olympic Games. NFLX's enterprise value is now $3.062 billion. NFLX is projected to report 2012 EBITDA of $137 million with EPS of -$0.12, before growing EBITDA in 2013 by 81.8% to $249 million. NFLX is currently trading with an enterprise value of 12.3X next year's EBITDA.
Synacor (SYNC) at $7.58 currently has an enterprise value of only $174.74 million when SYNC is projected to report a 2012 EPS profit of $0.14 vs. NFLX's 2012 EPS loss of -$0.12. SYNC is projected to report 2012 EBITDA of $12.1 million with 2013 EBITDA growth of 93.4% to $23.4 million.
SYNC will likely soon trade for at least 12.3X next year's projected EBITDA of $23.4 million. SYNC's enterprise value will be $287.82 million + $29.92 million net cash position = market cap of $317.74 million. Take a market cap of $317.74 million and divide by SYNC's 27 million shares outstanding and SYNC will likely finish October at $11.77 per share if they meet 3Q revenue estimates of $28.34 million!
SYNC is the publicly traded company that will benefit most from the London Olympic Games in their 3Q results! Because SYNC excluded the Olympics from their 3Q guidance, NIA believes SYNC has a very good chance of far surpassing 3Q estimates and finishing October a lot higher than $11.77! In the extremely unlikely event that SYNC misses estimates, it is likely to gain big anyway - that is how undervalued and oversold SYNC is at $7.58!
After SYNC gets 3Q results and 4Q guidance out of the way it will never see these levels again!
NIA is not an investment advisor and is not making any target prices or financial projections. Never invest based on anything NIA says. Always do your own research and make your own investment decisions. NIA never recommends to buy or sell any stock.
Disclaimer: NIA currently owns 486,035 shares of SYNC. NIA intends to sell these shares in the future and can do so at any time. NIA reserves the right to add to its SYNC position at any time.
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