Netflix Remains a Buy Despite Premium Valuation

about 1 month ago

Joseph Carlson

"Now, finally, in number six, the last stock that I'll highlight that I believe is a buy today is in the Story Fund. In this portfolio, I have a more concentrated look on a few companies, and one of them that has been an incredible winner in this portfolio, of course, is Netflix. It was as high as $1,300 per share, and now it's below $1,100 per share. While some investors will interpret this as an overpriced company coming back down to a more realistic valuation, I see it differently. I think that this is an opportunity for investors that have missed out on Netflix to finally take a bite. And the reason why is because I believe that Netflix is not overvalued. I've studied this company for a long period of time and I still believe there's far more to come that's not being priced in for Netflix."

The speaker explicitly recommends buying Netflix despite its premium valuation, arguing that the company's strong operating leverage, robust revenue growth, and long-term free cash flow expansion present a significant, underappreciated upside over the next five years.

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