Post 2Q23 Earnings, Netflix Still Looks Terribly Overvalued

Netflix’s second quarter results reaffirm my view that the stock remains highly overvalued and should trade closer to $153/share, instead of its current price of about $440. I was not surprised to see the stock down sharply after the release.

Netflix’s
NFLX
second quarter earnings continue to show that Netflix is a low-growth business with deteriorating profitability, while stock price implies soaring revenue and profits. Netflix’s stock has historically been driven by narrative and sentiment rather than fundamentals, but for those who pay attention to fundamentals, one thing is clear: Netflix is highly overvalued and a very risky investment.