NFLX is now overvalued and could go down -36%

Based on our analysis, Netflix has received an overvalued rating of 1 out of 5 stars by Cashu, primarily due to its high valuation ratios compared to industry averages. One of the key indicators is the Price-to-Earnings (PE) Ratio, which stands at 60.90, significantly higher than the sector average of 17.17. The PE Ratio indicates how much investors are willing to pay for each dollar of earnings. A high PE suggests that the stock may be overvalued relative to its earnings potential. Additionally, the Price-to-Book (PB) Ratio for Netflix is 15.40, in stark contrast to the sector's 2.16. The PB Ratio compares a company's market value to its book value, and a considerably high ratio may indicate that the market has overly optimistic expectations for the company's future growth. While Netflix boasts a strong Net Profit Margin of 22.34, outperforming the sector's -15.28, this metric alone does not justify its high valuation. Similarly, while the Return on Equity (ROE) Ratio is impressive at 35.21 compared to the sector's -25.52, these strong profitability metrics do not compensate for the high valuation ratios that suggest overvaluation. Lastly, the Return on Assets (ROA) Ratio of 16.24, compared to the sector’s -13.19, shows effective asset management, but does not mitigate concerns regarding the high PE and PB ratios. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.