Netflix is now worth more than $100B

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are collectively pushing a hidden agenda. It's as if there is this new way of valuing companies that is not based on DCF.

My only fear: soon there will be no BitTorrent seeders left.

I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P&#x2F;E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep.<p>For whom that does not understand company ratios, a P&#x2F;E ratio 230.24 is meaning that you need 230 years of profits to return to you the price you are paying today, of course, this does not consider that the company and profits will grow. But to have a parallel, at least in my country, really good companies have a P&#x2F;E between 20 and 30, on average, and 30 is considered very high.

Finding Netflix fairly frustrating these days. Despite their runaway success they haven’t really done anything to change the Hollywood model. 99.9% crap with a sprinkle of watchable content. And despite the hoards of engineers and machine learning wizards they employ, discovery and interface has regressed in their product. Only reason I haven’t canceled yet is avoiding the hassle of going full torrent&#x2F;YouTube.

Wanna see what a full blown network effect looks like, kidos — check out Netflix earnings.<p>More Subscribers ⤵️ More Revenue ⤵️ More $$ for Original Content and Licensing ⤵️ More bids won against networks ⤵️ More content on Netflix ⤵️ More Subscribers

Surprised Netflix hasn&#x27;t branched out into more content types or more dynamic content. You now have this two way communication channel seems kind of boring to not try and use it even just for mostly video content.<p>Some of their shows run 7+ million an episode. If you look at the development costs of simple mobile games and cut out all the stuff related to IAP it seems like they could create a lot of value for customers for pretty cheap by making some simple popular games without the IAP BS.

There&#x27;s a bubble. A bubble of desperation. You can&#x27;t put your money in the bank due to the low interest rates. Traditional businesses are not doing well. Investors are desperate to put their money to work. So we see bubbles in tech, bubbles in cryptocurrencies, bubbles in startups.<p>Best to watch what the legendary investors are doing. People like Warren Buffett, Prem Watsa, and the likes.

The price-to-earnings ratio is now 230, meaning that if an acquirer were to buy the company for cash at its current market capitalization, absent any growth in earnings, it would take the acquirer 230 years to earn the money back, all else remaining the same.<p>However, the 230-year figure might be optimistic, because Netflix&#x27;s cash flow from operations, before capital expenditures, has been negative for the past three years, largely due to fast-growing spending on content. Operations burned almost $1.8 billion last year. It could take longer than 230 years.<p>In theory, Netflix could stop aggressively investing in content <i>any time now</i>, and it would become more profitable. In theory, they could find other ways to monetize the content at some unspecified time in the future, to generate additional profits. <i>In theory</i>. In reality, it remains to be seen if they can and will do those things at some point in the future, and whether doing them will justify today&#x27;s market capitalization.<p>It is, how shall I say this, <i>questionable</i> whether Netflix will be able to generate sufficient cash flow in the future to justify today&#x27;s market capitalization. That said, I <i>love</i> the service and think the management team has done an <i>amazing</i> job building it, so I hope and wish they can pull it off, for the sake of their current investors, who must be relying on similar hopes and wishes.<p>BTW, Netflix is far from the most optimistically valued company today in terms of current earnings. Amazon&#x27;s price-to-earnings multiple is currently 335, and Salesforce&#x27;s is 14,796. These are not particularly unusual examples in today&#x27;s stock market. There quite a few companies trading at high-double, triple, quadruple, and quintuple multiples of earnings.<p>In other words, there are currently many companies whose earnings-payback period, for a would-be cash acquirer, all else remaining the same, is in the many decades, centuries, millennia, or even greater. It makes no sense to me.<p>Source for all figures: <a href="https:&#x2F;&#x2F;finance.google.com" rel="nofollow">https:&#x2F;&#x2F;finance.google.com</a>

Wonder why Q4 had such a big bump but Q1 2018 seems to be dropping back down to prior levels. Is this just people purchasing subscriptions at the holiday? Discounts? Special content?

Can we infer from this that at the end of Q3 they had ~25 million subscribers?<p>I am not planning to cancel Netflix but I am frustrated at how terrible most of the content is, and how hard it is to find anything with the current interface. I hope they&#x27;re rethinking their UX and reconsidering their current approach of &quot;License a bunch of really cheap awful content to make it seem like there&#x27;s a lot of stuff to watch.&quot;

Netflix is going to tank if Disney makes their stuff (including Fox) exclusive to hulu or a new service.

And still uses gibberish, machine-translated subtitles. (Bulgarian)

These days I prefer Amazon video content. It&#x27;s also significantly cheaper. 5 bucks instead of 20. Then you add the fact that their Android app is bad and that not even Netflix Originals are available globally, Netflix doesn&#x27;t seem to be that great.

$100B?! That&#x27;s like Dogecoin X 50 back in the day.*<p>(* which is to say last week.)

How do they make money?? I mean - seriously? And how will they stand up now that NN is gone and any company&#x2F;website using much more traffic will be force to pay more?<p>Please help me with the math -- at any given day, me, my wife and 2 kids are streaming netflix on multiple devices in HD; most likely pulling tens of gigabytes of data per day. How is that all covered under $10.99 per month?? and on the top - they make solid profit?? HOW??

Please, sell half of it; we could have a Mars <i>and</i> Moon base at the same time for that money...