They don’t need to increase earnings. In today’s tech market a P/E of 20 pretty awesome. The average for internet companies is almost 84. The whole market average is 90. The modern stock market doesn’t care about PE, nobody is holding stock for earnings, they’re just holding for the next rise. All this has really done is make Netflix a buy, because it will rise.
“They don’t need to increase earnings. In today’s tech market a P/E of 20 pretty awesome. The average for internet companies is almost 84. The whole market average is 90. The modern stock market doesn’t care about PE, nobody is holding stock for earnings, they’re just holding for the next rise. All this has really done is make Netflix a buy, because it will rise.”
I don’t know where you get your data. The S&P 500 foward P/E is 19 with an implied earnings growth of more than 8%.
NETFLIX will absolutely have to grow earnings to increase price.
+1