‘Expensive, but not stupid expensive’: How two traders would play Netflix as stock hits all-time highs

Netflix desires to be bought if it pulls support, two traders informed CNBC after the stock hit a file excessive Tuesday.

Atlantic Equities raised its model aim on the stock to a Avenue excessive of $780 per share, citing global adoption in Japan, India and Latin The united states ex-Brazil. Netflix accomplished buying and selling up almost 3% at $606.71.

“On a relative model-to-gross sales ratio, the stock is dear, but now not lifeless expensive,” Laffer Tengler Investments chief investment officer Nancy Tengler talked about on “Shopping and selling Nation.”

Even supposing Netflix does face a obedient share of headwinds — excessive affirm charges, detrimental operating money run, detrimental free money run and the slack wind-down of end-at-dwelling dwelling — it also has pricing vitality, a 5-year retain on the rights to “Seinfeld” and a aim of as much as 260 million subscribers worldwide by 2024, she talked about.

“Whenever you produce now not have it and it’s most realistic to, you relate away at it slowly,” Tengler talked about. “Nevertheless it be a dear stock and lots of of the factual recordsdata is priced in, so you may maybe increase opportunities.”

With analysts waiting for Netflix to develop earnings per share by 23% subsequent year, the stock does appear to be pleased some runway, Inner Edge Capital Administration founder Todd Gordon talked about within the identical interview.

“That comes out to 47 times forward earnings which, as Nancy talked about, is now not lifeless expensive, nonetheless it be expensive,” he talked about. “On a pullback, I would perhaps maybe like to remove extra.”

Streaming customers would perhaps maybe also become extra model-wide awake as economic stimulus programs cease, giving technique to opportune declines in Netflix shares, Gordon talked about.

“The rest support to 575, I judge that you can add when you happen to produce now not have it already,” he talked about.

Disclosure: Gordon owns shares of Netflix.

Disclaimer