Netflix Inc. : equity valuation
Autor(a) principal: | |
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Data de Publicação: | 2018 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/25488 |
Resumo: | The aim of this dissertation is estimating the fair value of one unit of Netflix’s common stock, at the end of the year 2018. Two valuation methodologies are utilized, the first being the Discounted Cash-Flow (DCF) approach and the second being the relative valuation methodology, being the multiples used the P/E, EV/EBITDA and EV/Sales. The valuation output is then compared to the equity research report of Morgan Stanley on Netflix. The valuation output is that Netflix is overvalued in the market, being the fair value of one unit of common stock estimated to be $239,35 at the end of 2018, while the stock is trading at $328,53 on the 15th of May 2018. Hence, the recommendation produced in this dissertation is a sell recommendation. This recommendation is only a function of the DCF approach, since the relative valuation outputs were not consistent across the different multiples used nor with the value computed through the DCF approach. Morgan Stanley estimates the value of one unit of common stock at the end of 2018 to be $275, which is a higher valuation than the one estimated in this dissertation and also yields an opposite recommendation, as Netflix’s stock was trading at $227,58 at the time of valuation. This difference is mainly explained by different assumptions regarding the evolution of Netflix’s FCFFs, as the WACC in both valuations differs only 12 basis points and the perpetual growth rate differs only 17 basis points. |
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Netflix Inc. : equity valuationValuationDiscounted Cash-FlowMultiplesDomínio/Área Científica::Ciências Sociais::Economia e GestãoThe aim of this dissertation is estimating the fair value of one unit of Netflix’s common stock, at the end of the year 2018. Two valuation methodologies are utilized, the first being the Discounted Cash-Flow (DCF) approach and the second being the relative valuation methodology, being the multiples used the P/E, EV/EBITDA and EV/Sales. The valuation output is then compared to the equity research report of Morgan Stanley on Netflix. The valuation output is that Netflix is overvalued in the market, being the fair value of one unit of common stock estimated to be $239,35 at the end of 2018, while the stock is trading at $328,53 on the 15th of May 2018. Hence, the recommendation produced in this dissertation is a sell recommendation. This recommendation is only a function of the DCF approach, since the relative valuation outputs were not consistent across the different multiples used nor with the value computed through the DCF approach. Morgan Stanley estimates the value of one unit of common stock at the end of 2018 to be $275, which is a higher valuation than the one estimated in this dissertation and also yields an opposite recommendation, as Netflix’s stock was trading at $227,58 at the time of valuation. This difference is mainly explained by different assumptions regarding the evolution of Netflix’s FCFFs, as the WACC in both valuations differs only 12 basis points and the perpetual growth rate differs only 17 basis points.Esta dissertação pretende estimar o justo-valor de uma ação da Netflix no final de 2018. Para tal, dois métodos de avaliação são utilizados, sendo o primeiro o método de Discounted Cash-Flow (DCF) e o segundo o método de relative valuation, sendo os múltiplos utilizados o P/E, EV/EBITDA e o EV/Sales. O resultado obtido nesta avaliação é posteriormente comparado com o equity research report produzido pela Morgan Stanley sobre a Netflix. A avaliação realizada estima que as ações da Netflix estão sobreavaliadas no mercado. O justo-valor de uma ação é estimado ser $239,35 no final de 2018, no entanto, as mesmas estão a ser transacionadas no mercado a 15 de Maio de 2018 por $328,53. Assim, a recomendação produzida é de que os investidores devem vender as ações em questão. Esta recomendação é feita apenas em função do método DCF, dado que os resultados obtidos através da relative valuation são inconsistentes entre os diferentes múltiplos usados e inconsistentes com o resultado obtido através do método DCF. A Morgan Stanley estima o justo-valor de uma ação da Netflix no final de 2018 em $275. Este valor é superior ao estimado nesta dissertação e resulta numa recomendação oposta, dado que, à data da avaliação realizada pela Morgan Stanley, as ações da Netflix transacionavam a $227,58. A diferença entre as avaliações é essencialmente explicada por diferentes pressupostos relativos à evolução dos FCFFs, visto que o WACC e a taxa de crescimento em perpetuidade diferem apenas 12 e 17 pontos base entre as avaliações, respetivamente.Martins, José Carlos TudelaVeritati - Repositório Institucional da Universidade Católica PortuguesaAlves, José Pedro Fernandes Rito2018-08-07T12:44:55Z2018-07-1020182018-07-10T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.14/25488TID:201961938enginfo: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:RCAAP2023-07-12T17:30:53Zoai:repositorio.ucp.pt:10400.14/25488Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:20:19.908816Repositório 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 |
Netflix Inc. : equity valuation |
title |
Netflix Inc. : equity valuation |
spellingShingle |
Netflix Inc. : equity valuation Alves, José Pedro Fernandes Rito Valuation Discounted Cash-Flow Multiples Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
title_short |
Netflix Inc. : equity valuation |
title_full |
Netflix Inc. : equity valuation |
title_fullStr |
Netflix Inc. : equity valuation |
title_full_unstemmed |
Netflix Inc. : equity valuation |
title_sort |
Netflix Inc. : equity valuation |
author |
Alves, José Pedro Fernandes Rito |
author_facet |
Alves, José Pedro Fernandes Rito |
author_role |
author |
dc.contributor.none.fl_str_mv |
Martins, José Carlos Tudela Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Alves, José Pedro Fernandes Rito |
dc.subject.por.fl_str_mv |
Valuation Discounted Cash-Flow Multiples Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
topic |
Valuation Discounted Cash-Flow Multiples Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
description |
The aim of this dissertation is estimating the fair value of one unit of Netflix’s common stock, at the end of the year 2018. Two valuation methodologies are utilized, the first being the Discounted Cash-Flow (DCF) approach and the second being the relative valuation methodology, being the multiples used the P/E, EV/EBITDA and EV/Sales. The valuation output is then compared to the equity research report of Morgan Stanley on Netflix. The valuation output is that Netflix is overvalued in the market, being the fair value of one unit of common stock estimated to be $239,35 at the end of 2018, while the stock is trading at $328,53 on the 15th of May 2018. Hence, the recommendation produced in this dissertation is a sell recommendation. This recommendation is only a function of the DCF approach, since the relative valuation outputs were not consistent across the different multiples used nor with the value computed through the DCF approach. Morgan Stanley estimates the value of one unit of common stock at the end of 2018 to be $275, which is a higher valuation than the one estimated in this dissertation and also yields an opposite recommendation, as Netflix’s stock was trading at $227,58 at the time of valuation. This difference is mainly explained by different assumptions regarding the evolution of Netflix’s FCFFs, as the WACC in both valuations differs only 12 basis points and the perpetual growth rate differs only 17 basis points. |
publishDate |
2018 |
dc.date.none.fl_str_mv |
2018-08-07T12:44:55Z 2018-07-10 2018 2018-07-10T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
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publishedVersion |
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http://hdl.handle.net/10400.14/25488 TID:201961938 |
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TID:201961938 |
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eng |
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eng |
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openAccess |
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application/pdf |
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reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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