Looking at Netflix’s Valuation

Here’s a look at Netflix’s stock along with its earnings-per-share. The stock is in blue and it follows the left scale. The earnings are in gold and follow the right scale. Wall Street’s projections are in red.

I’ve scaled the ratios at a ratio of 40-for-1 so whenever the lines cross, the P/E Ratio is exactly 40. That’s much higher than I normally use but the chart would be difficult to read at a ratio less than that. At this earlier post, I used a ratio of 20-for-1 and we’ve run so far past that.

Here’s a comparison of the P/E Ratio of the S&P 500 and that of Netflix. It wasn’t too long ago that they were similar.

Posted by on February 14th, 2011 at 7:18 pm


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