the Netflix-Aktie (WKN: 552484) buy now or not? Many investors fear that growth will slow permanently and that the fundamental valuation will be too expensive. Others, in turn, focus on the long-term growth opportunities that continue to exist in the streaming market. The discount is a welcome gift.
Of course, time will tell what Netflix’s stock is now. However, the opportunity is outweighed by justifiable risks. Also, early analysts say the stock is now more interesting than it was last year. All we have to do is look at the chart. But there are other features that underline this.
Netflix shares: more attractive than those of 2021?
So far this year, Netflix shares have lost nearly 40% of their market value. For this reason alone, stock certificates are priced more attractively than they are in 2021. Although this knowledge doesn’t even sound as shallow as it actually is.
If we dig a little deeper, we see that Netflix stock is actually priced relatively cheap. With a price per share of $343.86 and 2021 earnings per share of $11.54, the price-to-earnings ratio is currently 29.8. If we believe in higher growth, we can call it an attractive valuation measure. Historically, a price/sales ratio of 5.3 also seems economical. At least if growth continues as expected.
But can the streaming leader continue to grow? Put positively: yes. In the first quarter, users are expected to grow another 7 million quarter over quarter. Sales should also increase. The net result is a different construction site. There may be pressures from investments in content and new businesses like game streaming. But: If the valuation becomes cheaper in the long run, the stock is really attractive. Or just cheap.
There’s no question that Netflix stock has attractive merits. Fundamental economic valuation and strong growth opportunities in the streaming megatrend market are the foundation for strong returns. It is not enough to say that the stock has a more attractive value today. No, but a closer look at the details shows that the stock has quite a bit of value for growth stocks.
Interesting, despite the threats.
To be sure, there are risks to Netflix stock. Competition and the need to invest in the attractiveness of the platform itself are potential construction sites. But the streaming market is still a growing market. And the top dog, well, continues to grow in quality and quantity.
Whether you should buy this blend is another question. But the fact that the stock is attractive can hardly be denied at this point in valuation terms. The rest, in turn, must be fed with business-oriented content. After all, a favorable review is only half the battle.
The article The Netflix fee is more attractive than a year ago: Oh what! first appeared in The Motley Fool Germany.
Vincent owns shares in Netflix. The Motley Fool owns stock and recommends Netflix.
Motley Fool Germany 2022