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Comparing Netflix’s Valuations with Its Peers

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Peer comparisons based on market capitalization

On July 5, Netflix’s (NFLX) market capitalization stood at $169.8 billion. Its peers in the online entertainment space reported the following market cap levels on that date:

  • Amazon (AMZN): $822.0 billion
  • Google (GOOGL): $775.3 billion
  • Disney (DIS): $154.7 billion
  • Facebook (FB): $558.1 billion
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Netflix’s valuation metrics

On July 5, Netflix was trading at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] multiple of ~82.81x. As shown in the graph above, Amazon, Google, Disney, and Facebook had forward EV-to-EBITDA multiples of ~28.27x, ~13.34x, ~10.06x, and ~14.67x, respectively. 

On July 5, Netflix was trading at a forward PE (price-to-earnings) multiple of ~136.66x. On that date, Amazon, Google, Disney, and Facebook had forward PE multiples of ~134.62x, ~25.09x, ~14.65x, and ~24.92x, respectively.

Bollinger Band

In the July 5 trading session, Netflix stock closed at $394.00, close to its lower Bollinger Band level of $354.00. This value indicates that the stock is oversold, which investors could take it as a “buy” signal.

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Short interest ratio

On July 5, Netflix’s short interest as a percentage of its shares outstanding (or short interest ratio) was ~2.64%. Generally, a short interest ratio that’s greater than 40.0% implies that investors and traders expect the company’s stock price to decline.

Historic stock return

In the last year, Netflix stock has climbed 5.2%. In the last month, NFLX stock has risen 7.2%. However, the company’s stock has fallen 3.6% in the last five days.

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