Netflix (NASDAQ:NFLX) stock is overvalued. That's the opinion of analysts at Benchmark, who maintained a Sell rating and $440 price target on the streaming giant's shares in a note Thursday, heading into the company's earnings release.
The firm feels that Netflix's current valuation "more than recognizes a favorable decade forward growth profile."
"Intermediate-term, although not near-term, member growth risks vs. our forecast may gear to the downside with sensitivities to ten-year member installed base and operating margin suggesting some giddiness underlying Netflix's most recent stock price run even with global streaming leadership and unique profitability achievement," wrote analysts at Benchmark.
"Although we regard Netflix as more of a media stock than a tech stock, this $440 valuation is favorably relative to the Nasdaq 100 rather than the
S&P 500," they added.
Benchmark feels the valuation reflects a fair 20.2 times EBITDA multiple with fair value above the current stock price attained only in 2027 at a then 16.5 times the EBITDA multiple. "We arrive at a fair 12.5x target EBITDA multiple even in 2033," said the firm.
