Netflix Stock: The Market Still Isn't Pricing In The Ad Business (NASDAQ:NFLX) | Seeking Alpha
HomeStock IdeasLong IdeasCommunication ServicesSummaryNetflix now trades at $70, but with 67% more revenue, 2. 5x operating income, and much higher margins than at this price in 2021. Despite recent de-rating. . .
HomeStock IdeasLong IdeasCommunication ServicesSummaryNetflix now trades at $70, but with 67% more revenue, 2. 5x operating income, and much higher margins than at this price in 2021. Despite recent de-rating due to missed guidance and slower engagement, NFLX offers a historically cheap valuation—46% below its 5-year average P/E and PEG below 1. The advertising segment, now 6% of revenue and rapidly scaling, could add $5–$7 billion in high-margin revenue over three years, yet is priced at zero. I see a compelling risk/reward setup: 13–14% revenue growth, 20%+ EPS growth, robust buybacks, and a margin of safety rarely seen in NFLX. Ethan Miller/Getty Images NewsI first bought Netflix (NFLX) in March 2020, right in the middle of COVID, at around $36 a share (split-adjusted). My portfolio was tiny back then compared to what it is today, and to be completely honest, I didn't really know57 FollowersAnalyst’s Disclosure:I/we have a beneficial long position in the shares of NFLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure:Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.