I don't consider NFLX "cheap"
NFLX threw off significant amounts of free cash flow during the last few quarters. Yes, the writer/actor strikes contributed, and are not sustainable. That said, the strikes did highlight NFLX's deep library of content that sustained (and arguably strengthened) their financial position in the short run and weakened their domestic competitors. Some might argue this is an anti-fragile characteristic which is hard to find.
NFLX bought back ~$5B in stock over the last (3) quarters. While the current business may be getting close to saturation (I think there is plenty of room globally), they have the platform and capital to change. Already they are adding an advertising-supported product, sports, and considering gaming options. Who knows what other options that they are considering? They appear to have a deep global distribution platform, and the ability to competitively invest in content.
While I don't consider NFLX "cheap" it also doesn't appear terribly mis-priced, selling at a valuation pretty consistent with its past and its peers. While valuation (like beauty) is in the eye of the beholder, I consider modestly mis-priced and offering a 13-15% annualized rate of return over the next 3-5 years. Viewership, and subscriber growth are my biggest concerns.
Looking in from the sidelines at the moment. Good luck to all.
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