Do you think Netflix stocks are undervalued?
I am looking at many companies, and found Netflix to be quite undervalued based on its cashflow. (the other two are Oracle and Apple). Do you know why the market may price Netflix to be lower? Is it due to media streaming a market easy to enter and customers can easily switch over? (like HBO, Showtime can do their own streaming, or go onto Apple TV / YouTube to be streamed). For people who say "I won't invest in Netflix", care to say the reason why? tc $350k #investments #personalfinance
Based on discounted cash flow formula, intrinsic value of Netflix hovers around 313 and it's a bit overvalued
oh you are using simplywall.st ? Maybe they are doing the calculation with the current interest rate hike... I guess it is hard to say. With a 5% interest rate, NFLX can be viewed as overvalued, but if it is a 3% interest rate, then it can be undervalued. Also, the depreciation costs... if NFLX buys a lot of server machines, they could depreciate to $0 or by the pound in 15 years. But if it is Amazon buying warehouses, that depreciation cost can actually mean assets that balloon to 2x value in 15 years.
Netflix runs on AWS, there’s nothing to depreciate
Havent every studio started streaming now? They have been making movies for years and have so many which they will pull away from Netflix some day. Heck even youtube is getting lot of movies. Whats Netflix advantage? They can make more shows bug that costs a lot
Hey @OP can you elaborate on "undervalued based on cash flow" ? Do you mean free cash flow ?
The market also factors in future growth as another fundamental metric. Netflix still has a large overhang that's casting doubt about whether I can't keep growing subscriber numbers. As more news about the ad based models are working their stock price should improve.
Fking steaming subscription deals are becoming just like cable bundles. It’s so annoying. First there was Netflix. Then all those production houses said, they are gonna take their toys and play by themselves.