Netflix Stock Dips After Doubling Its Value This Past Year
In the Economist article, Netflix Suffers a Big Wobble, states that it added only 5.2 million subscribers in the 2nd quarter of 2018, much less than the projected number of 6.2 million subscribers. Because of this disappointing result, the stock lost 14% of its value.
Markets nonetheless have reason to be jittery about Netflix, if only because it has some of the priciest shares around. The company’s price-earnings ratio sits at around 170, and its annual cashflow is negative to the tune of billions of dollars. The firm’s rise has mostly come on the back of the promise of future growth.
Would you invest in Netflix? Would Netflix double its value again this year? Do you think Netflix's valuation is sound despite having a negative annual cashflow number?
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