Netflix is still overvalued at these levels, says Morning Star's Matthew Dolgin

Summary

Matthew Dolgin, senior equity analyst at Morningstar, joined CNBC's Closing Bell Overtime to discuss Netflix's latest earnings. He said the quarter was decent but guidance was light, with margins and free cash flow below expectations. Dolgin believes Netflix remains overvalued at current levels because its growth is maturing, and he sees the potential Warner Bros. Discovery acquisition as either unnecessary for growth or potentially value destructive if Netflix overpays. He still views Netflix as the dominant streaming player with over 325 million subscribers and growth well ahead of peers.

• Netflix shares fell to session lows after a narrow earnings beat but light guidance.
• Dolgin said Q4 revenue was roughly in line while margins and free cash flow were light.
• He views Netflix as a maturing business that may struggle to sustain prior growth rates.
• He says Netflix is still overvalued, though closer to fair value.
• Without WBD deal, organic growth slowdown is the issue; with a deal, Netflix may overpay.
• Netflix remains dominant with over 325 million subscribers and growth ahead of peers.
• He does not expect the quarter's results or guidance to affect regulators' view of the potential deal.