Peer Valuation Comparison For Netflix StockĬonsensus Forward One-Year Enterprise Value-to-Revenue MultipleĬonsensus Forward Two-Year Enterprise Value-to-Revenue MultipleĬonsensus Forward One-Year Revenue Growth RateĬonsensus Forward Two-Year Revenue Growth Rate NFLX trades at a premium to some of the other tech giants and streaming peers based on the forward Enterprise Value-to-Revenue valuation metric, despite boasting inferior expected revenue growth rates as compared to most of its peers. In my opinion, Netflix's valuations are demanding, and it might be challenging for Netflix to even hit the average price target of $649.07 in a year's time. Wall Street Analysts' Target Prices For NFLX If we take the average of these target prices, the implied upside for NFLX is +20% based on the sell-side's mean consensus price target price of $649.07. In contrast, the most bearish sell-side analyst covering Netflix sees the company's stock price falling to $190, which translates to a potential downside of -65%. The sell-side analysts appear to be divided on Netflix's stock price outlook in 2022, according to consensus price targets which are typically set with a timeframe of between six months to a year.īased on Netflix's last traded share price of $541.06, the most bullish analyst expects the company's shares to appreciate by +48% with a target price of $800. In the subsequent section, I look at what Wall Street expects Netflix's share price performance to be like in 2022. In addition's Netflix's Q4 2021 guidance was also pretty modest, with its expected revenue of $7.71 billion and net subscriber additions of 8.5 million coming in +0.4% and +2.2% above market expectations. Source: Seeking Alpha's Earnings Data For NetflixĮven with the success of "Squid Game" (September 17 premiere), which was "the most-watched Netflix content of all time" according to a NovemThe Korea Herald article, NFLX's revenue growth further slowed from +22.7% YoY in Q3 2020 to +16.3% YoY in the most recent Q3 2021. NFLX's Historical YoY Revenue Growth By Quarter NFLX's YoY revenue growth has moderated from +27.6% in Q1 2020 to +24.2% in Q1 2021, while its Q2 2021 YoY top line expansion was +19.4% in Q2 2021 as compared with its Q2 2020 YoY revenue growth rate of +24.9%. Netflix's relative share price underperformance is understandable, if one considers the company's slowing revenue expansion on a YoY basis. Source: Seeking Alpha's Charting Data For Netflix Last year, Netflix's shares rose by +15.2%, but this only represented about half of the S&P 500's +30.6% jump over the same period. Netflix's 2021 stock price performance was decent on an absolute basis, but this paled in comparison with that of the S&P 500. Based on an analysis of these factors, I think Netflix can meet the market consensus' revenue expectations in 2022, but I don't see the company achieving substantial revenue beats. When it comes to Netflix's outlook this year, the key factors to watch out for include its line-up of new shows, the company's app download data, and changes to its subscription charges in international markets. I assign a Hold investment rating to Netflix, Inc. GoodLifeStudio/iStock Unreleased via Getty Images Elevator Pitch
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