With Netflix's market cap now exceeding Disney, I'm trying to get a handle on what really drives these valuations.
For example, Disney has a P/E of ~13, whereas Netflix is more than 250. The forward PE of Disney (does that mean expected number in 2019) is still about 13, and netflix's is 90. So is this an indication that Netflix is growing a lot faster than Disney? Is that what explains the rising price of Netflix, the fact that it's expected to grow so much year over year?
The other thing I'm trying to wrap my head around is will these valuations hold up if the market changes? Right now, people are able to throw a lot of money at future growth, but when it comes down to it Disney seems like a way safer buy. They have tangible assets such as the theme parks and the real estate therein. They also have paid a consistent dividend for years.
Would love to hear your thoughts. I started investing last year, so I have a lot to learn.
Submitted June 26, 2018 at 05:25PM by DATY4944 https://ift.tt/2lCQNPk
