Netflix: Selling Pressure Builds As Reality Sets In

Netflix reported earnings just above consensus, but the market found the result underwhelming given its valuation.

NFLX is now growing earnings in the low teens, with next quarter guidance at 12% growth. The current price-earnings ratio of 20 appears excessive relative to the 12% growth rate, suggesting overvaluation.

As NFLX transitions from a story stock to a going concern, traditional valuation models now apply, requiring investor mindset adjustment.