I wouldn't do that. At least not yet. Netflix isn't done.What I don't get is how a stock like Netflix is trading where it is at. Even with the slight decline now it is trading something like at a multiple of 190 PE multiple and has a lot of debt. I have a co-worker who has made a ton off netflix and she doesn't know anything about investing. So I am bitter.
With Amazon Prime, HBO streaming, and Disney getting Fox content along with ESPN content and they plan to have their own streaming service, I see a lot of competition for streaming content and don't see people willing to pay for a lot of streaming services.
If I had any balls, I would short Netflix.
Netflix is a growth stock. Growth stocks tend to defy gravity for a lot longer than you would expect. When they fall, they really, really fall. But you cannot predict a growth stock's future based on its current P/E ratio--because its price is a reflection of future earnings growth.
I would agree that Netflix is currently overvalued, but it's still growing faster than anyone expected. If you short it right now, you're going to get squeezed(assuming we didn't just enter a new bear market, in which case all bets are off). As the market is sinking well below its 50-day moving average, Netflix continues to find support at its 21-EMA even after an extended run. It's showing a lot of strength right now.
I'm actually waiting for the market volatility to subside so I can buy back into Netflix.
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