Netflix Is 43% Below Its 52-Week High at 20 Times Forward Earnings. Where Will the Stock Be in 3 Years?
The streaming leader no longer trades like a growth stock. Run the numbers forward, and that's exactly what makes it interesting.
Overview
Netflix (NASDAQ: NFLX) trades at $72.39 as of this writing, down about 43% from its 52-week high of $126.71. Along the way down, something notable happened to the stock's price tag: Shares finally look reasonably priced. The stock now costs about 20 times the earnings analysts expect from the company over the coming year. At last year's high, the same forward estimate would have priced the stock in the mid-30s.
The rapid-growth premium, in short, is gone. The interesting question is what the stock is worth by 2029 if the business simply keeps doing what its own guidance describes. The arithmetic is worth walking through.
Image source: The Motley Fool.
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Originally published at www.fool.com.