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Thread: netflix
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Old 07-17-2017, 10:11 PM   #8
reckless
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Join Date: Jun 2002
Location: near Philadelphia
Posts: 4,560
In fiscal year ending 2016 Netflix earned $20 in free cash flow.

As a point of comparison
Netflix earned $10 in 2012, $12 in 2013, $14 in 2014 and $14.50 in 2015. It's been a money machine from jump street, and continues more so today.

If you buy Netflix now at $160, you are paying 8 times free cash flow (FCF). A great bargain for a great growing company. It's been a long term hold of mine for many years.

I have as my own estimate Netflix generating $23 FCF in 2018, and $25 in 2019.

At 8 times FCF, Netflix is worth about $185 in '18, and $200 in 2019.

At 10 times FCF, we're looking at $230 and $250, respectively.

I am told 15 times FCF is considered a 'fair' valuation for a public company. I have never in my adult life paid 15 times or more FCF for a company, btw.

So, at 15 times FCF, the 'fair' intrinsic value of Netflix is $300 right now; $345 next year and $375 in 2019.

One of the great bargains in today's market.

Last edited by reckless; 07-17-2017 at 10:13 PM.
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