Netflix (NFLX 2.62%) is a category-defining enterprise that has come to lead its industry. And today, the streaming giant is one of the top choices that households have when consuming video content. Shares have done well recently, soaring 277% in the past three years (as of Nov. 18).
But this dominant streaming stock trades 16% below its peak. Should you invest $1,000 in Netflix right now?
Image source: Netflix.
All signs point to Netflix being an outstanding company
Netflix possesses a leading brand in the media and entertainment landscape. Its name has become so strong that it's often used as a verb, showcasing the consumer mindshare that it now commands.
The business today generates robust profits, with free cash flow expected to total $9 billion this year. This is a direct result of Netflix's massive scale, with more than 300 million subscribers as of year-end 2024.
The company isn't done growing. It continues to register double-digit revenue gains, which might indicate a long expansionary runway.
NASDAQ: NFLX
Key Data Points
What about the valuation?
This is an outstanding company that long-term investors should want to own. But the valuation is a key piece of the investment decision-making process.
Netflix is far from being a bargain, with the stock trading at a price-to-earnings ratio of 46. Investors should wait for a better opportunity.
