bullish
Much Ado About Netflix - House of Cards, or Queen's Gambit at 17x PE?
SUMMARY
- NFLX’s share price has since fallen by -68% YTD, resulting in their current valuation of 17x trailing PE. This was likely due to three recent changes from the status quo: 1) negative 1Q22 subscriber growth, 2) password sharing crackdown, and 3) their entry into an ad-supported business model.
NFLX’s reporting of their Amortization of content assets reflects a true & fair view of their consumption patterns; and their outsized Commitments & Contingencies are all above board. No hanky panky going on here.
We’ve actually seen this story before - Investors seem to have forgotten that NFLX actually experienced similar concerns during 2015, 2018 and 2019 - when their share price experienced drawdowns of -30%, -40% and -30% respectively.
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