My 2c. Netflix was trading near a 40 P/E. This usually implies that the stock price is based on a belief about a huge future growth and that they would contin

My 2c. Netflix was trading near a 40 P/E. This usually implies that the stock price is based on a belief about a huge future growth and that they would continue adding large numbers of subscribers every month. When they reversed the trend, they could no longer justify a high P/E, so the stock switched to be priced as a slow growth and riskier stock at a lower P/E.