Netflix has had a long, upward ride, in its stock price.
In 2008, Netflix’s stock could be purchased for under $4. In May of 2010, a share of stock could be purchased for $14 per share. In 2012, the share price went down to under $12. The share price is now $252, on 2/2/2018. On 8/29/2017, the share price was $165, for a gain of almost $90 in approximately 7 months. This is nothing less than incredible.
The price-earning ratio is now almost 100 (92.74). I looked at an estimate of the 5 year earnings growth rate of Netflix, which is 26.67%. Watch out for any miss on the earnings growth.
We have past data, for the years ending 12/31/2014 to 12/31/2017. In that period, revenue went from approximately $5.5 billion to $11.7 billion, approximately double. Net Income increased from $226.8 million to $559 million.
The risk with Netflix stock is if earnings growth is not as expected, the stock returns to a normal price-earnings ratio. The industry average price-earnings ratio is under 12.
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Attorney Robert M. Singer
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