Value: Value is a measure of a stock's current worth. NFLX has a current Value of $69.70 per share. Therefore, it is overvalued compared to its Price of $120.90 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
THe "value of an asset, is what the free markets determine it to be or " Price". Think about this-if all assets were "Properly Priced"@ the" Proper Value" per mathamtical formulas, there would be no buying or selling, or markets for that matter, as there would be no reason to trade assets, becuase no profit incentive.
2- You also assume that NFLX stock price has to fall to reach the equilibrum between, what you say is " Price" & " Value". Right now NFLX is " Priced" for the Value to rise to meet it at a higher equilibrium. Its the glass half full vs glass half empty approach.
So, NFLX "Price" @ 120.90 is properly valued in the free market place , as most feel the Mathametical "Value" will rise to meet the "Price"
That's how you make money in the market!!! Investing 101: You bet on the difference between perception and reality. Buy undervalued stocks. Short overvalued stocks. Netflix definitely belongs to the second category, according to that article.
Yes s we well know stocks can get WAY overvalued and then plumment back to a reasonable value.Netflix by no analysis is reasonably valued therefore its over valued.It will plumment at anytime.The traders and shorts are all that holding it up.
that must be the dumbest thing I have heard, by that token should it trade at $ 12000 then that would be the true price and valuation both ???, HA !
ITs true Mkt esists for two groups to trade in a theoratical free mkt approach assuming under vigilant regulations, full "Honest" disclosure, no insider trading , no hoarding, no price fixing assumptions. All of them are hard realties whether oneway or another.
On top of that MM manipulation, Creative accounting,Bogus news , Biased media pump, makes the market more like Poker table than anything else
On a poker table either you call, Fold or Raise.
If you have less chips then them you FOLD, that is what rules this market and stock like NLFLX.
You follow the big money, BUT BIg Money is already IN holding more than 91%, where do they go from here, buy from one another, in which case one sells and other buys, what if this selling creates more selling amongst them ??
As I said in earlier post, retail investor is simply inconsequential in stocks like this, if you are existing investor them good for you , take your chip to the cashier and get your cash, Congratulation you won !