Quickly and quietly, shares of glamour stock
have fallen nearly 20% from their 52-week high set earlier this
month. The stock is still up slightly year-to-date, but shares are
clearly in a downward trend:
It's tough to pinpoint a single reason for the selloff. There
hasn't been any news over the last few weeks that would explain the
move (other than recent reports about a potential Apple-Comcast
joint streaming service; although shares had been selling off well
before this announcement). Consensus earnings estimates have held
up just fine. And there haven't been any notable analyst downgrades
that I could find.
Netflix hasn't been the only glamour stock to take it on the
chin this month either. High fliers like
have seen double-digit declines over the last couple of weeks
Perhaps uncertainty overseas has led to a classic "flight to
safety" among investors. Or maybe investors are finally starting to
pay attention to the fundamentals again now that the Fed is
unwinding its quantitative easing program and discussing a
potential rate hike?
Even after its selloff, Netflix still trades at a lofty 76x
12-month forward earnings, which is well above its 10-year median
of 36x. But there is some phenomenal growth projected for the
company too. Based on current consensus estimates, analysts expect
EPS to grow 99% this year and 78% next year.
So do you think the selloff in Netflix (NFLX) will
continue? Or does this pullback present a good buying
opportunity for investors?
Chime in below!
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