Netflix is a video streaming service headquartered in Los Gatos, California. Founded in 1997 by Marc Randolph and Reed Hastings, Netflix offers streaming access to TV series, documentaries, feature films and mobile games.
As of September 2023, Netflix is one of the world’s most popular video streaming services, with more than 238 million paying members in more than 190 countries.
April 5, 2024: Pivotal Research analysts maintained a Buy rating on Netflix, with an updated price target of $765 (up from $700), according to Benzinga.
March 27, 2024: Wedbush analyst Michael Pachter maintained an Outperform rating on Netflix, with an updated price target of $725 (up from $615), according to Benzinga.
March 20, 2024: It's been a positive year so far for Netflix investors, with the shares up by over 30% since the beginning of the year and an even more impressive gain of over 100% in the past year.
Netflix has experienced a slowdown in growth rates to single digits in 2022 and 2023, but there are signs of a return to double-digit growth in the near future.
Key catalysts for this potential growth include efforts to monetize account sharing through "paid sharing" and the development of a nascent advertising business, which is expected to become material to Netflix's revenue in 2024.
The company's revenue growth has already begun to accelerate, with management guiding for a double-digit growth rate of 10.7% in the fourth quarter of 2023.
Only you can make the decision on the time to leap... but here's some supporting information and analysis.
Over the last 12 months, Netflix's shares have ranged in value from as little as $315.62 up to $639. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NASDAQ average) beta is 1, while Netflix's is 1.218. This would suggest that Netflix's shares are a little bit more volatile than the average for this exchange and represent, relatively-speaking, a slightly higher risk (but potentially also market-beating returns).
Historical closes compared with the last close of $611.15
| 1 week (2024-04-12) | -1.88% |
|---|---|
| 1 month (2024-03-19) | -1.54% |
| 3 months (2024-01-19) | 26.55% |
| 6 months (2023-10-19) | 52.11% |
| 1 year (2023-04-19) | 89.14% |
| 2 years (2022-04-19) | 75.31% |
| 3 years (2021-04-19) | 10.23% |
| 5 years (2019-04-18) | 69.60% |
The gauge below shows real-time ratings that are based on 26 popular indicators such as moving averages, for specific time periods. It's not a recommendation but is simply technical analysis that can form part of your research.
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Valuing a stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of overall performance. However, analysts commonly use some key metrics to help gauge value. Check out the Netflix P/E ratio, PEG ratio and EBITDA
Netflix's current stock price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 51x. In other words, Netflix stocks trade at around 51x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the United States stock markets on average as of November 10, 2023 (20.44). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
Netflix's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 1.7203. A PEG ratio over 1 can be interpreted as meaning shares are overvalued at the current rate of growth, or may anticipate an acceleration in growth.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Netflix's future profitability. By accounting for growth, it could also help you if you're comparing the stock prices of multiple high-growth companies.
Netflix's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping $7.3 billion.
The EBITDA is a measure of a Netflix's overall financial performance and is widely used to measure a its profitability.
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