They Provided 13000% Returns Since Their IPO. Are They Still Undervalued?

This company has definitely not been Netflix and chilling when it comes to its financial performance, and while subscribers binged their favorite true crime series, behind the scenes, Netflix was delivering blockbuster returns. 

With a staggering surge since its IPO, the question looms: is Netflix still an undervalued gem in the investment landscape?

Netflix's Stratospheric Growth

With a remarkable surge of 13,500% since its IPO, Netflix's stock has been a standout performer in the market. Despite occasional fluctuations, its overall trend has been one of remarkable growth, attracting the attention of investors worldwide.

Navigating Market Volatility

Over the last month alone, Netflix's share price has surged by 7%, outperforming broader market indices despite ongoing market volatility. This recent uptick further underscores investor confidence in Netflix's resilience and growth potential.

While there have been ups and downs, Netflix's resilience and ability to adapt to changing market dynamics have been key factors in its continued success. Despite increasing competition in the streaming game, Netflix has maintained its position as a dominant player, leveraging its vast content library and global subscriber base to drive revenue growth.

Analyzing the Buy Recommendation

Despite its soaring stock price and remarkable returns, many investors are still contemplating whether Netflix is worth buying into at its current valuation. However, a closer look at Netflix's fundamentals and growth prospects reveals why many analysts recommend it as a Buy.

The company generated a 21% operating margin last year, with management forecasting a 25% margin in 2024. These figures mark a significant increase from the operating margin of 10% reported in 2018. Netflix's ability to produce sizable profits is evident in its meaningful free cash flow, which amounted to $6.9 billion last year. This has allowed the leadership team to institute a stock buyback program, with $8 billion of outstanding shares repurchased in the past five quarters.

Looking Ahead

While Netflix's stock may seem lofty to some, its track record of delivering exceptional returns and its continued growth trajectory makes it a compelling investment option. Netflix's history of adapting and thriving in a rapidly changing landscape bodes well for its long-term prospects. 

Sean Kelland has no positions in any of the stocks mentioned. Stocks.News has positions in Netflix. Please see our disclosure page for more information.