With this note we are updating our relative SaaS valuation on Netflix. Based on its prior trading history, we continue to believe Netflix should trade on a SaaS metrics basis. This involves metrics such as annual churn rate, customer lifetime value (CLTV) and customer growth costs (CGC) rather than on a traditional P/E or EV/EBITDA basis. Earlier this week we discussed Netflix’s Q3/17 results while updating our price target of $241. We also re-iterated our buy rating on the stock. Increasing Customer Lifetime Value – Q2 vs. Q3: We base our valuation on a CLTV / Trailing 12-month CGC. The CLTV is the gross margin the […]
Daily Archives: Saturday, October 21, 2017 7:07pm
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