Is Netflix (NFLX) Stock a Buy?
Netflix (NASDAQ: NFLX) has been the best-performing stock in my portfolio over several decades. It has averaged an annual gain of 28.6% over the past 15 years, enough to turn a $1,000 investment into one worth more than $43,000. (By comparison, the S&P 500 averaged very solid annual gains of 14% over the same period, enough to turn $1,000 into around $7,262.) While looking back is very nice, investors should be more interested in looking forward: Is Netflix a buy now?
Image source: The Motley Fool.
Let’s take a look. First, if you just assess a few rough valuation measures, the stock seems somewhat undervalued to fairly valued. For example, its price-to-sales ratio was recently 6.3, just a smidge below its five-year average of 6.5, and its recent forward-looking price-to-earnings (P/E) ratio of 18 is well below its five-year average of 30.
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