NFLX dip after earning, quite some growth is still priced in IMO
u/Wooden_Fondant_703 ·
Reddit — r/ValueInvesting
· April 18, 2026 at 03:25
· ⬆ 15 pts
· 💬 23 comments
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Summary
The post analyzes Netflix (NFLX) following a post-earnings price dip, acknowledging its strong business moat and profitability but questioning its high valuation and future leadership.
The author's thesis is that while NFLX has a durable competitive advantage, its current P/E ratio of 38x implies unrealistic growth expectations, compounded by the uncertainty of Reed Hastings' board departure, making it unjustified as a "buy."
Quality assessment: This is reasoned speculation/opinion, not deep due diligence. It uses some high-level financial metrics and qualitative insights but lacks detailed financial modeling or comprehensive industry analysis.
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I've been watching NFLX for a while. I've friends working there and he attests Netflix's decent culture. It's a quite profitable business with 48% gross margin and \~30% operating margin. I know many people for whom Netflix is their last subscription to cancel, much like the Cable TV in the 80-90s. Quite wide moat!
**What I don't like**
\- It's not cheap at all. 38x PE, on a 5 year DCF implied \~30% CAGR. That's not a easy task.
\- Reed Hastings is leaving the board. I over index the leadership's role. I think his leaving created huge uncertainty down the road.
More of my thoughts on the recent ER: [https://dullbusiness.substack.com/p/nflx-q1-2026-strip-out-the-warner](https://dullbusiness.substack.com/p/nflx-q1-2026-strip-out-the-warner)
Anyone has a strong buy thesis? I think at this valuation even the wide moat can't justify a clear buy.
NFLX trades at a high valuation (38x P/E) which implies ~30% CAGR growth, a difficult target, and key founder Reed Hastings is leaving the board. The wide business moat and profitability are already more than priced in, leaving asymmetric risk if growth slows or execution falters under new leadership. The current price does not provide a sufficient margin of safety for a value investor, recommending a stance of avoidance despite the company's strengths. NFLX could continue to execute and grow into its valuation, or leadership transition could be smoother than anticipated, driving the stock higher.
This Reddit post, published April 18, 2026,
features u/Wooden_Fondant_703
discussing NFLX.
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