Netflix - what am I missing?

u/Intelligent_Gap2495 · Reddit — r/ValueInvesting · August 07, 2026 at 20:33 · ⬆ 15 pts · 💬 20 comments  | View on Reddit ↗
AI Summary

Summary

  • Author models NFLX with 12-13% revenue growth, >28% EBIT margin, 4% terminal growth, yet DCF shows ~26% overvalued.
  • Main disagreement is WACC: author calculates 10.8% vs common valuation sites using 7-8%, driven by beta/equity cost assumptions.
  • Quality assessment: Thoughtful valuation exercise but essentially a calibration question, not a full actionable DD thesis.
Score 15
Comments 20
Upvote % 83%
Ideas
u/Intelligent_Gap2495 Reddit r/ValueInvesting
Author's DCF at 10.8% WACC implies NFLX is 26% overvalued, while standard valuation inputs use 7-8% WACC. The entire bearish signal depends on WACC; if the author's higher WACC is correct, the stock screens expensive, creating a potential short/watch setup. The author is uncertain and asking what they are missing, so this is a watch item rather than a high-conviction short. WACC may be overstated due to beta/tax/risk-free rate assumptions; NFLX's growth and margin expansion could justify a higher multiple.
NFLX LOW
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This Reddit post, published August 07, 2026, features u/Intelligent_Gap2495 discussing NFLX. 1 trade idea extracted by AI with direction and confidence scoring.

Speakers: u/Intelligent_Gap2495  · Tickers: NFLX