(MONEY Magazine) – TICKER PRICE P/E 52-WEEK RANGE DIVIDEND NFLX $30 59 $9 TO $40 NONE

BRILLIANT IDEA! The online DVD-rental service has revolutionized the way you watch movies. No more late fees. No more waiting weeks to snag your video store's only copy of Breakfast at Tiffany's. Netflix has expanded from just 600,000 subscribers to 2 million in just a couple of years. That phenomenal growth has given Netflix stock something of a cult following--the shares are up 136% over the past 12 months.

BUT... In mid-April, Netflix shares plunged after the company said it would hike its regular monthly fee by $2 in an effort to prop up profit margins. Wal-Mart and Blockbuster are now trying to muscle in on the business. And as cable companies roll out video on demand, Netflix's by-mail delivery may look a little less attractive. CEO Reed Hastings says customer loyalty to the Netflix brand will help him hold off competitors, just as Amazon.com did. Of course, Amazon stock is down 49% over the past five years.

OUR ADVICE Avoid the stock. Trading at 59 times expected 2004 earnings, the shares are vulnerable to a sharp decline even if business goes well for Netflix. --STEPHANIE D. SMITH

Note: As of April 22. Source: Bloomberg.