Equity valuation: Netflix, Inc

Detalhes bibliográficos
Autor(a) principal: Santos, Ricardo Sérgio Gomes
Data de Publicação: 2021
Tipo de documento: Dissertação
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10071/24366
Resumo: This dissertation concerns the estimation of the fair value of Netflix, Inc. share at the end of December 31, 2020. After a review of the entertainment and media industry and Netflix’s past business and financial performance, two approaches will be presented to value the company. The first is a DCF analysis based on Netflix’s financial statements, using WACC as the discount rate. As a second stage valuation, an analysis comparing the company’s multiples with those of similar companies was made to assess both the DCF’s forecasts and Netflix’s performance with the competition. Additionally, we complemented our valuation by conducting a sensitivity analysis to check the robustness of our assumptions and respective estimations. Through our DCF analysis, we reached a target price of $306.60. By emphasizing the results of the two valuation methodologies applied, the premise is that Netflix is overvalued in comparison to the market price of $540.73 as of the end of 2020. Thus, the results obtained lead us to recommend selling Netflix’s shares.
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spelling Equity valuation: Netflix, IncNetflixEntertainment and mediaDCF analysisWACCFair valueMultiplesEntretenimento e mediaAnálise DCFJusto valorMúltiplosThis dissertation concerns the estimation of the fair value of Netflix, Inc. share at the end of December 31, 2020. After a review of the entertainment and media industry and Netflix’s past business and financial performance, two approaches will be presented to value the company. The first is a DCF analysis based on Netflix’s financial statements, using WACC as the discount rate. As a second stage valuation, an analysis comparing the company’s multiples with those of similar companies was made to assess both the DCF’s forecasts and Netflix’s performance with the competition. Additionally, we complemented our valuation by conducting a sensitivity analysis to check the robustness of our assumptions and respective estimations. Through our DCF analysis, we reached a target price of $306.60. By emphasizing the results of the two valuation methodologies applied, the premise is that Netflix is overvalued in comparison to the market price of $540.73 as of the end of 2020. Thus, the results obtained lead us to recommend selling Netflix’s shares.Esta dissertação tem como objetivo estimar o justo valor da ação da Netflix, Inc. a 31 de dezembro de 2020. Após uma revisão da indústria de entretenimento e media e do desempenho financeiro e operacional histórico da Netflix, apresentam-se duas abordagens para avaliar a empresa. A primeira é uma análise DCF com base nas demonstrações financeiras da Netflix, usando o WACC como taxa de desconto. A segunda é uma análise comparando os múltiplos da empresa com os de empresas semelhantes para avaliar os resultados da análise DCF e o desempenho da Netflix face à concorrência. Adicionalmente, complementámos a nossa avaliação conduzindo uma análise de sensibilidade para verificar a robustez dos nossos pressupostos e das respetivas projeções. Através da nossa análise de DCF, alcançámos um preço-alvo de $306.60. Dando ênfase aos resultados dos dois métodos de avaliação utilizados, a conclusão é a de que a Netflix está sobrevalorizada em comparação com o preço de fecho de $540.73 no final de 2020. Desta forma, os resultados obtidos levam-nos a recomendar a venda das ações da Netflix.2022-01-28T10:43:55Z2021-12-22T00:00:00Z2021-12-222021-10info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10071/24366TID:202896307engSantos, Ricardo Sérgio Gomesinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:49:15Zoai:repositorio.iscte-iul.pt:10071/24366Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:24:10.465459Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Equity valuation: Netflix, Inc
title Equity valuation: Netflix, Inc
spellingShingle Equity valuation: Netflix, Inc
Santos, Ricardo Sérgio Gomes
Netflix
Entertainment and media
DCF analysis
WACC
Fair value
Multiples
Entretenimento e media
Análise DCF
Justo valor
Múltiplos
title_short Equity valuation: Netflix, Inc
title_full Equity valuation: Netflix, Inc
title_fullStr Equity valuation: Netflix, Inc
title_full_unstemmed Equity valuation: Netflix, Inc
title_sort Equity valuation: Netflix, Inc
author Santos, Ricardo Sérgio Gomes
author_facet Santos, Ricardo Sérgio Gomes
author_role author
dc.contributor.author.fl_str_mv Santos, Ricardo Sérgio Gomes
dc.subject.por.fl_str_mv Netflix
Entertainment and media
DCF analysis
WACC
Fair value
Multiples
Entretenimento e media
Análise DCF
Justo valor
Múltiplos
topic Netflix
Entertainment and media
DCF analysis
WACC
Fair value
Multiples
Entretenimento e media
Análise DCF
Justo valor
Múltiplos
description This dissertation concerns the estimation of the fair value of Netflix, Inc. share at the end of December 31, 2020. After a review of the entertainment and media industry and Netflix’s past business and financial performance, two approaches will be presented to value the company. The first is a DCF analysis based on Netflix’s financial statements, using WACC as the discount rate. As a second stage valuation, an analysis comparing the company’s multiples with those of similar companies was made to assess both the DCF’s forecasts and Netflix’s performance with the competition. Additionally, we complemented our valuation by conducting a sensitivity analysis to check the robustness of our assumptions and respective estimations. Through our DCF analysis, we reached a target price of $306.60. By emphasizing the results of the two valuation methodologies applied, the premise is that Netflix is overvalued in comparison to the market price of $540.73 as of the end of 2020. Thus, the results obtained lead us to recommend selling Netflix’s shares.
publishDate 2021
dc.date.none.fl_str_mv 2021-12-22T00:00:00Z
2021-12-22
2021-10
2022-01-28T10:43:55Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/masterThesis
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status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10071/24366
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identifier_str_mv TID:202896307
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instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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