Is Netflix a Better Buy than SpaceX and the “Magnificent Seven” Stocks in July: Down 46%

Once upon a time, Netflix was part of the elite “Magnificent Seven” club, along with other tech giants like Facebook, Amazon, and Google. But times change, and Netflix has seen a decline in its stock performance in recent years.

Last summer, Netflix hit a record high stock price of $134 per share, but since then, it has dropped by 46%. Despite this, Netflix still has a market capitalization of $299 billion, making it a prominent player in the streaming entertainment space.

Currently, Netflix shares are trading at a very reasonable price, with a price-to-earnings ratio of 23 and a price-to-free cash flow ratio of 25. This is below the average S&P 500 stock, making it an attractive investment opportunity.

While Netflix has lost out on some recent bidding wars for companies like Warner Bros. Discovery and Roku, this shouldn’t be cause for concern. Management’s decision not to overpay shows fiscal discipline, rather than weakness.

With less than 10% of U.S. TV viewing time, Netflix still has room to grow and capture more of the streaming market. Additionally, Netflix has several growth drivers in its arsenal, including international expansion, video games, and an advertising platform.

While Netflix may not be as flashy as some of the other tech giants like SpaceX, Nvidia, or Tesla, it presents a solid investment opportunity at current prices. Unfashionable stocks like Netflix often come at tempting prices, making them appealing picks for investors looking for long-term growth potential.