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Netflix Stock: Should You Buy the Post-Earnings Dip?
The Motley Fool • • business
Key Points:
- Netflix reported third-quarter earnings with revenue of approximately $12.9 billion and earnings per share of 87 cents, slightly beating analyst expectations, but the stock still declined.
- The main concern for investors is Netflix's guidance, projecting full-year revenue of $51.1 billion, which is at the lower end of its previous range and below analyst expectations.
- Despite meeting earnings expectations, Netflix's slowing growth worries have caused its stock to fall to levels not seen in over two years, down about 30% since the start of the year.
- Netflix's stock has lost more than 40% of its value over the past year and now trades at a forward price-to-earnings ratio of 17, making it appear relatively cheap compared to the S&P 500 average of 19.
- Investors face a dilemma between viewing Netflix as a bargain buy due to its valuation or cautioning that further declines could occur amid growth concerns.
