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Not really, it indicates how long if nothing changes over the long term. Which never happens. Netflix is growing very rapidly which makes P/E all but meaningles
by jonknee 9y ago
Not really, it indicates how long if nothing changes over the long term. Which never happens. Netflix is growing very rapidly which makes P/E all but meaningless for "how long" questions.
- edpichler 9y agoYou are right. Today it represents just an expectation. On future, the P/E will decrease and stabilize after the company make profit and consolidate.
- jonknee 9y agoIt doesn't really even represent an expectation because nobody expects their financials to stay the same. Forward P/E fits that bill a little better.
- brisance 9y agoThe metric that Netflix uses is subscriber count, and all indications is that the subscriber count is not growing at a pace that explains the PE ratio. In fact the growth is declining as evidenced by their guidance for the quarter. http://www.businessinsider.com/netflix-q4-earnings-report-analysis-subscribers-revenue-eps-2018-1 http://www.businessinsider.com/netflix-q4-earnings-report-an...