Netflix
Are Markets Overvaluing These 3 Stocks? LULU, NFLX, SQTwo recent stock events have called into question how markets are pricing stocks. The first event is the OG meme stock, Tesla (NASDAQ: TSLA), hitting a one trillion-dollar market cap. And the second event is EV newcomer Rivian Automotive (NASDAQ: RIVN), surpassing the valuation of Ford Motor Company (NYSE: F) after listing on the NASDAQ.
One way to gauge how overvalued a stock may be is to find its multiple (aka, Price-To-Earnings ratio). In the case of Tesla, it’s multiple, as of writing, is ~350. In the case of Rivian, it doesn’t have any sales to speak of, so a multiple for this Company is not discernible (as reported by Bloomberg; “Rivian is now the biggest US company with no sales”). Investors can be concerned about high multiples if the Company in question is unlikely to grow its profitability to a level that better reflects the stock’s current price. Tesla and Rivian are just two companies that analysts (incl. Tesla’s CEO Elon Musk) commonly point out as overvalued.
Keep reading to learn what other 3 stocks market analysts commonly categorise as overvalued.
Are Markets Overvaluing These 3 Stocks? LULU, NFLX, SQ
Lululemon Athletica (NASDAQ: LULU)
Several outlets, including Forbes, noted the athleisure wear company to be overvalued in the first half of 2021. Yet, difficult to discourage, investors have continued to support the Company and further bumped up the stock’s price. LULU is currently trading at an 15% premium above its first-half peak price (US $404 vs US $465). Its current valuation places its multiple at ~74x earnings.
The momentum behind the stock is driven by its consistent earnings report beats and ambitious sales targets set by management, which are being hit or surpassed with surprising frequency. The Company’s outlook is buoyed by a growing (and incredibly loyal) customer base and higher margins. In this way, Lululemon stock may well be within a fair valuation if it continues to ride the growth momentum in which it is currently swept up.
Netflix (NASDAQ: NFLX)
Numerous Analysts were calling Netflix overvalued in 2020, even as the streaming giant reported subscriber growth beats during quarantine lockdowns and beyond. Bearish comments would call attention to the cash-burn needed by Netflix for the foreseeable future to maintain its industry leadership and satisfy its growing user base.
Bullish sentiment could counter this argument by pointing to the Company improving operating margins (e.g., Netflix has improved its operating margin from 16% to 23.5% YTD). However, Netflix does not include content generation spending as an operating cost. Instead, it is considered a fixed cost for the business. Yet, suppose Netflix is going to be burning cash producing content for the foreseeable future. In that case, the improving operating margin might be considered no more an accounting trick than a meaningful metric.
As of writing, Netflix shares are trading at US ~$690, indicating a multiple of approximately ~62 earnings.
Square (NYSE: SQ)
The digital payment provider Square appears to be firmly in the camp of overvalued tech stock. At least, according to Morningstar analysts, SQ is trading at more than double its “fair value estimate” (US ~$230 vs. $112) with a Price-To-Earnings value of ~240. SQ shares have not traded at US $112.00 or below since July 13, 2020.
While SQ does deliver on growth, it still has a very long way to go to justify its ~240x multiple. Square’s dubious long-term outlook is compounded by the increasingly tense competition from PayPal (NASDAQ: PYPL) and Fiserv’s (NASDAQ: FISV) Clover application. While younger than Square’s payment solution, the latter is already processing more payments across the US, and importantly, growing at a faster pace.
Expect to grow to $ 150The price has been going up for a long time. The correction after the first wave has ended and now the third (impulsive) wave has started. Expect to grow to $ 150
nflx analyse . i think for this week it's going down . with the double top pattern . the key levels are in the chart . That's My Personnal Opinion . Hope You Like it .
growth to $920stocks move for a long time in an uptrend. after breaking through resistance, I expect growth to $ 920
NETFLIX"Netflix Inc. overtook Walt Disney Co. in market value for the first time since last year after the amusement park owner's earnings stoked concerns about slowing subscriber growth in its streaming business." (1)
Right now, Netflix is in the Top 5 list of producers of original television and movies. After titles such as Squid Game, Stranger Things, and more, we saw a great pump in Netflix's value.
As NASDAQ announced, the ATH for Netflix is at $690.31, our most substantial resistance level.
NASDAQ is also showing Strong Buy Volumes for Netflix, which shows solid support for its value.
My research showed that Netflix has the potential to reach the $1000 levels (or close to that area), so it's safe to say that we have the chance to break this resistance after a few retests.
Use this chart as your trade setup for now; I'll keep it updated.
Current Market Price: $682.61
Let me know your ideas.
Good luck.
Citation:
(1) "Netflix Is Closing In on Disney Again In Terms of Market Value."
finance.yahoo.com
$NFLX Trend and Fibonacci Extension $NFLX has been trading in this range on the 4 hour chart for over a month. OBV looks good and MACD looks like its about to turn bullish. the 5 and 9 mas seem to be holding it up as well. If it can break my fib level at 661.91 tomorrow, I believe it can get to or near the next level at 673.11. If it can break my fib level, I will take a high risk daytrade on the $665 calls expiration 11/12. This could also be a good opportunity to take a longer position if the market is bullish.
NETFLIX analysis = sellNetflix stock will down
1 = have in chart bearish cup and handle pattern
2 = have a negative divergence by RSI indicator
3 = up trend broken and started in down trend
4 = my favorite indicator give a signal for sell
5 = good luck
NETFLIX - Where to next? 🎬The big question is not just where Netflix ends up going next but where is the market as such going.
Will there be a good correction inbound or is the market just taking a small pause now to rise higher very soon?
The answers will unfold in front of us in the next coming weeks but let's take a look at NETFLIX nad share some news with you:
- Netflix is making a big push into video games
The company first dabbled in games with interactive titles like Black Mirror: Bandersnatch and a Carmen Sandiego game, but in 2021, it made gaming a much bigger priority. Netflix hired a former EA exec in July to lead its gaming efforts and, in November, let people play a selection of mobile games for free as part of their subscriptions.
- Heavy investment into the anime industry
Tons of shows, including some very high profile sequels. In addition to animated productions, they’ve also announced live-action adaptations of several anime, original live-action series, and several films. It is, despite my reticence to hand it to Netflix, a pretty good lineup.
- International Series
This is the part I particularly like about Netflix. First the Spanish 'Casa de papel', then the Korean 'Squid games' and who knows what's next. This recipe has been a huge success no-matter how the sequels end up being inferior to the original series. Netflix brings us closer to other cultures in an increasingly smaller world.
If the markets as such help, Netflix will thrive. If a correction deepens then it will be all about using this chart to buy the dip.
Let's see what happens, as these are now unclear times for equities.
One Love,
the FXPROFESSOR
target is still around $700the price reached support and bounced off it. target is still around $700
$NFLX | WEEKLY WATCHLIST 11/8Netflix is one of the few counts I have that look to have a potential significant local top put in. Looking for a corrective wave 4 to take place here and would be very healthy for the stock. Wait for confirmation first.
NFLX More Correction or Rise?Netflix is in the uptrend and currently, price has been pushed to the upside, after touching the ascending trend line and also the first support zone (S1).
On the other hand, the last 4H candle has been closed a little lower, below the trend line.
We still don’t know if this is a fake breakout or not… we should wait for the current 4H candle to see if it will be closed below the last candle and also below S1 or it will be closed above them.
If price closes a bearish candle below S1, we can expect more downside move and retrace around the second support zone (S2) which is around $615.
If price could close a bullish candle above S1, we can expect a rise towards the last high which is $690, and in the case of an upside breakout on that level, the next target would be $740
Up and UpNetflix is steadily going up. The price is moving in an uptrend and has now bounced off the resistance. Most likely, the price will consolidate to $ 646, bounce and go up to new highs: $ 700, $ 720, $ 740.
New target $705Netflix stocks are steadily going up, hitting new highs. The price will again accumulate in the zone, and after that, there is a possibility of a breakout and further growth upward to the $705 area.
nflx analysethere is a break of the up trend . i think it will go down to 625. or 620. it's just a guess . Hope You Like it.
S/t NFLX route@wardaK This one is for you. You asked what's my current though on NFLX S/T.
I believe we see NFLX show some sign of consolidation possibly after it goes towards 700 pysc lvl.
Expect Support to be held from 662-672 to be held and bot up for the next rips.
Market leader iMO -- alongside FB , TSLA , COST
NFLX s/tShort term trade , possibly can happen today. NFLX over highs will be targeting 690 $ .
Been on fire . Currently in ROKU , don't personally like Nflx options , only commons for this one.
Less room for movement, Ascending Wedge NFLXHello everyone! A rising wedge is commonly know as a reversal pattern, I'm looking to short NFLX once we reach the resistance zone in this rising wedge. Even with all the hype from Squid Game numbers and positive earnings, price is not moving much as weeks before. Today Oct 19 NFLX rise in post-market trading to the 663 (wedge resistance zone) and pullback immediately, coincidence? Just an easy setup, remember to have a stop loss!
Not a financial advisor, just my personal idea. Enjoy your week.
$NFLX | WEEKLY WATCHLIST 10/25If markets show signs of weakness at any point in the near future, I believe Netflix will be one of the most prime short setup out there. Many signs pointing to downside here for the stock.
- Recent run-up due to overall hype and the massive success of Squid Games (believe we need to cool off a bit)
- Concluded all Minute, Minor and Intermediate EWT counts (assuming my count is correct)
- $VIX sitting on major support and is at it's second lowest weekly close since 2/10/20 (market is susceptible to a pullback)
With that being said, I will wait for downside confirmation as well as volume before entering a short position on Netflix. I would also want the indices to be confirming on a downtrend as well as $VIX to be in an uptrend. These factors combined would get me short. All in all, I'm still bullish in the long-term as shown.
nflx analysein my opinion there is 2 possibilites the first is going down for a retest then start an up trend to 700. the second is to go back in the rectangle so we could have a fake break . that's my personnal opinion.
Q3 Earnings Report Recap; TSLA, NFLX, JNJ, PGQ3 earning season is currently underway, and most high-profile companies are delivering revenue beats. Yet, Q3 revenue is not the only thing investors are watching. Investors are interested in revenue growth, customer acquisition, and pace of growth alongside the balance sheet. Inflationary and supply chain pressures that may affect the outlook of reporting companies are an additional concern for investors.
TESLA (NASDAQ: TSLA)
Reported: Wednesday, after trading
Revenue: $13.8 billion
Earnings per share: $1.86 profit per share (Non-GAAP)
Tesla’s Q3, 2021 earnings were, once again, record-setting for the Company. The Company is increasing sales and has stated it is on track to “achieve 50% average annual growth in vehicle deliveries” at a time when chip shortages are hampering other automakers ability to do so. Improving gross margins (up to 30.5%) was also a significant factor in Tesla performance in Q3.
Netflix (NASDAQ: NFLX)
Reported: Tuesday, after trading
Revenue: $7.5 billion
Earnings per share: $3.19
The popularity of Netflix’s series Squid Game hadn’t completely filtered into the Company’s finances at the time of its Q3, 2021 earnings report. Yet, Netflix delivered a favourable report, with revenue coming in on par and subscriber growth beating expectations. Squid Game IP is estimated to be worth $900 million to Netflix and should help boost its Q4 earnings, which typically get a seasonal bump anyway.
Johnson & Johnson (NYSE: JNJ)
Reported: Tuesday, before trading
Revenue: $23.3 billion
Earnings per share: $2.60
Johnson & Johnson’s Q3 earnings-per-share beat expectations, with revenue climbing 10.7% from the previous corresponding period. J&J increased its (bottom-end) revenue guidance for the full year from $93.8 billion – $94.6 billion to $94.1 billion to $94.6 billion. J&J noted that its Covid vaccine would be responsible for $2.5 billion at years end and $502 million of its Q3 revenue.
Proctor and Gamble (NYSE: PG)
Reported: Tuesday, before trading
Revenue: $20.3 billion
Earnings per share: $1.61
PG beat revenue estimates, increasing sales revenue by 5% over the last quarter, but expects to fall short of 2020 revenue. The consumer goods Company also noted that rising producer costs, particularly as it relates to shipping and raw commodity prices, has already had and is going to continue to have a larger-than-anticipated effect on its earnings. In response, PG has begun raising the prices of some of its premium products as a quick remedy to help offset its rising costs.
Earning Seasons continues next week:
There are plenty more juicy earning reports due next week.
Facebook, after the bell Monday
Microsoft, Alphabet, Visa, Texas Instruments, and AMD, after the bell Tuesday
Thermo Fisher Scientific, Coca-Cola, McDonald’s, and Boeing, before the bell Wednesday
Ford, after the bell Wednesday
Shopify, before the bell Thursday
Apple, Amazon, and Starbucks after the bell Thursday
