Is Netflix stock a cheap buy? Here's what the charts say

As a FAANG stock, Netflix is one of the market's most traded stocks. With that in mind, are its shares considered cheap today? The post Is Netflix stock a cheap buy? Here's what the charts say…

Is Netflix stock a cheap buy? Here's what the charts say

Netflix (NASDAQ: NFLX), stock lost over 70% of its value in one year. The stock has increased by 70% in the past. Netflix stock has seen a significant decline in value since hitting a record high in 2021. The streaming service suffered as people watched less movies and shows, and economies recovered. Its margins also suffered. However, the stock has not fallen to a level it hasn't seen since 2019. The stock's current price-to earnings (P/E), which is 26., is even more impressive. The P/E ratio is not a reliable indicator. It is more accurate to evaluate Netflix's future P/E. This includes its future earnings forecast. It's still more costly than the S&P, with a forward PE of 27. However, I do believe that there is a reason for these higher multiples. The firm's first advertising tier is its new one. Users pay a lower fee, but must watch ads. This tier is expected to bring back some of the users that were lost in 2022, according to the board. Its second venture is into gaming on the platform. The two major drivers of the group have not lived up to their expectations. Users aren’t growing as fast as expected. More importantly, advertising revenue is not meeting the management targets by more than 20%. Netflix has been offering discounts and refunds for advertisers. Netflix's track record of returning shareholder value is a silver lining. This has resulted in a strong balance sheet. While its debt-to equity ratio of 67.7% seems to be healthy, it is still far below its total debt. Overall, the streamer retains a moderate buy rating. The average price target at $303 is only a small upside over current levels. Low-impact solutions and macroeconomic headwinds don't make this stock attractive to me. The post Netflix stock: a bargain buy John Choong does not hold any shares mentioned. Roku has been recommended by The Motley Fool UK. The opinions expressed in this article about the companies mentioned are the author's. They may not be the official recommendations that we make in our subscriptions services like Share Advisor, Hidden Winners, and Pro. Motley Fool UK 2022