Is Netflix Inc (NFLX) overvalued?
On Equity Rank's model estimate, NFLX trades close to its fair value (10% below it). Netflix Inc (NFLX) last closed at $63.41; the multi-method model fair value is $70.17.
| Price | Model fair value | Price vs model |
|---|---|---|
| $63.41 | $70.17 | 10% below |
What the answer rests on
- 4 of 9 valuation methods put NFLX's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, NFLX's free cash flow would need to grow about 15.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 80.1% a year.
- NFLX trades at 19.2 times its last year's earnings, against a median of 34.2 for 13 profitable Streaming companies.
- Over the past year the price sat below the model fair value on 91% of trading days. The gap ranged from 10% below to 6% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind NFLX's fair value · What prices assume · Other companies