InvestorsObserver
×
News Home

Should You Buy Netflix Inc (NFLX) Stock Tuesday?

Tuesday, December 07, 2021 02:05 PM | InvestorsObserver Analysts

Mentioned in this article

Should You Buy Netflix Inc (NFLX) Stock Tuesday?

Netflix Inc (NFLX) receives a strong valuation score of 63 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. NFLX holds a better value than 63% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

Valuation Rank - 63
NFLX gets a 63 Valuation Rank today. Find out what this means to you and get the rest of the rankings on NFLX!

Metrics Analysis

NFLX's trailing-12-month Price to Earnings (PE) ratio of 55.2 puts it above the historical average of roughly 15. NFLX is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. NFLX's trailing-12-month earnings per share (EPS) of 11.10 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low. NFLX's 12-month-forward PE to Growth (PEG) ratio of 1.82 is considered a poor value as the market is overvaluing NFLX in relation to the company's projected earnings growth due. NFLX's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

NFLX' has a weak valuation at its current share price on account of a overvalued PEG ratio despite strong growth. NFLX's PE and PEG are worse than the market average leading to a below average valuation score. Click Here to get the full Report on Netflix Inc (NFLX) stock.

You May Also Like

Get the InvestorsObserver App

InvestorsObserver App
iOS App Android App