Digital video veteran Netflix (NASDAQ:NFLX) has rarely been a cheap stock. The company consistently invests whatever spare capital it has available into accelerating its top-line growth for the long haul.

The bottom line typically hovers just above the breakeven point, making Netflix a tough pill to swallow for traditional value investors. Apart from the brief Qwikster episode of 2011 and 2012, where Netflix's share prices fell more than 70% on a year-over-year basis, the stock's price-to-earnings (P/E) ratio has hovered near 100 times trailing earnings for more than a decade. Right now, for example, Netflix's P/E ratio stands at a kingly 91 times earnings.

A roll of hundred-dollar bills and quarter coins cast a shadow in the shape of a rocket taking off.

Image source: Getty Images.

The more things change...

The story was much the same a decade ago. Even investors who respect the company and enjoyed the stock's 500% rise in three short years thought the stock was overvalued and that it would be a good idea to harvest some of those juicy profits.

When that bearish article was published, Netflix shares traded at 44 times trailing earnings and 28 times free cash flows. The split-adjusted stock price was $15.32 per share that day.

Netflix stock has posted a 2,840% return since then. Every $10,000 you took out of your Netflix position in July 2010 translates into $294,000 of missed 10-year profits.

I could tell the same story based on dozens of pessimistic evaluations posted near another all-time high, including just before the largest price drops in Netflix's history. The company could do no wrong in early 2011 as Netflix's digital streaming option started to disrupt the DVD-mailer bread-and-butter service, and the stock peaked at nearly $43 per split-adjusted share in July. Netflix shares traded at 76 times trailing earnings and 85 times free cash flows back then.

The Qwikster debacle followed, creating the best buy-in opportunity I've ever seen for a high-quality company whose global growth story was just getting started. If you bought Netflix shares near the bottom of that trough, you've turned every $10,000 of invested capital into more than half a million dollars in current returns:

NFLX Chart

NFLX data by YCharts

But even if you completely mistimed that plunge and made your full investment at the pre-Qwikster peak, you're still enjoying some market-crushing returns here:

NFLX Chart

NFLX data by YCharts

Your P/E ratios are no good here

P/E ratios and discounted cash flow analysis are fine tools when you're evaluating the investment value of slower-growing companies that prefer to pocket some profits rather than investing every spare penny into high-octane growth ideas. Netflix is not one of those companies, and financial ratios don't make sense in the context of full-fledged growth stocks like this one. The profits and cash flows will come when the low-hanging growth-promoting fruit is running out, but that's still several years away.

In the meantime, Netflix remains a solid buy even as the stock explores new all-time highs thanks to the coronavirus lockdown effect. If anything, the COVID-19 pandemic only accelerated Netflix's path toward saturated subscriber growth and a more profit-oriented business plan. The stock could post another big drop tomorrow for all we know, or it might never be this cheap again. Either way, I think you'll see exciting returns from Netflix over the next decade as well.