/Netflix%20On%20TV%20with%20Remote.jpg)
Shares of Netflix (NFLX) climbed to a 17-month high today and are up more than +171% from a 6-year low in May 2022. The stock has surged over the past year after introducing an ad-supported subscription plan and cracking down on password sharing. However, the rally has raised valuation concerns ahead of its second-quarter earnings results on Wednesday, as it trades 8% above the average analyst price target for the next 12 months.
According to Bloomberg data, Netflix trades at 34 times expected profits over the next 12 months. That’s up from about 27 times at the start of the year and represents a significant premium to the Nasdaq 100 Stock Index ($IUXX) (QQQ). Deutsche Bank said, “The valuation case for Netflix has gotten tougher,” but we think the setup for the stock is positive heading into Q2 earnings results.
