It’s been in this sideways range for 12+ months now. And whenever any stock gets stuck in a range for a while, once it finally breaks out of that range, it usually sees a powerful move.
Netflix stock spiked to a record high of 593.29 on Jan. 20th 2021, the day after its fourth-quarter earnings report. Wall Street analysts were cheered by the company's improved free cash flow and profitability. But the enthusiasm was short-lived and NFLX stock sold off in the days that followed.
Netflix's future is too difficult to predict. I recommend existing shareholders to hold the stock. For new investors, you have to be realistic. Netflix has an estimated EPS of $12.89 for FY22. If you want to buy Netflix at 2022 FAANG PE multiple (25x), the stock price should be $320, decrease by 42%. This is unlikely to happen. Businesses like Netflix will never be at our fair value. That does not mean we should not buy them. I recommend waiting for the stock to be under $450, decrease by at least 18%, which would mean the stock is trading at or under a PE ratio of 35x FY22 earnings. In today's market, companies with powerful brands such as Starbucks (NASDAQ:SBUX), Disney (NYSE:DIS) or Nike (NYSE:NKE) trade at this multiple. They have proved their ability to be constantly innovating, just like Netflix.
Netflix stock spiked to a record high of 593.29 on Jan. 20th 2021, the day after its fourth-quarter earnings report. Wall Street analysts were cheered by the company's improved free cash flow and profitability. But the enthusiasm was short-lived and NFLX stock sold off in the days that followed.
Netflix's future is too difficult to predict. I recommend existing shareholders to hold the stock. For new investors, you have to be realistic. Netflix has an estimated EPS of $12.89 for FY22. If you want to buy Netflix at 2022 FAANG PE multiple (25x), the stock price should be $320, decrease by 42%. This is unlikely to happen. Businesses like Netflix will never be at our fair value. That does not mean we should not buy them. I recommend waiting for the stock to be under $450, decrease by at least 18%, which would mean the stock is trading at or under a PE ratio of 35x FY22 earnings. In today's market, companies with powerful brands such as Starbucks (NASDAQ:SBUX), Disney (NYSE:DIS) or Nike (NYSE:NKE) trade at this multiple. They have proved their ability to be constantly innovating, just like Netflix.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.