Had to pause midway just to say this is another really great video Aswath. Thanks so much for putting in the time. I learn a ton from your content and I'm sure others do too. Really appreciate your hard work and commitment to education. Not gonna lie, I'm glad you couldn't sleep when you arrived in India because review of Netflix is dope. =P
Assuming fixed costs as variable ones does not look smart to me...Can we agree that just saying "I assume 15% growth for the first 5 years and 10% after..." is total nonsense?...is a specific guess that has no substance behind......looks to me classic professor attitude...numbers and spreadsheets to look accurate and scientific without any common sense behind...
17:00 You get a value of Equity per share of USD 172.82 "(...) well below the stock price at the time." But when I look at Netflix' chart at the date of the video Apr. 16, 2018, I get a per share price of USD 327.77. How is this possible?
hi one simple question. i see in the 2017 annual reports revenue of 11,7 billions . if divide 11,7 billion for 117,6 million subscribers you don't obtain 113 dollars as revenue/subscribers . what do i do wrong?
Great valuation, but the market is much much more optimistic about value per share. Seems like 2018 is a year when fundamentals were crushed and forgotten. 412 right now
Your knowledge and simple way to explain things empowers individual like me. Please kindly keep posting videos. Thank you and Namaste from Toronto. Sincerely, your virtual student 😊
Great, as usual. Thanks a ton for this.Would love to go through valuation of disney. Wondering how would you dis aggregate or aggregate values resulting from the same IP across different verticals like theme parks & merchandising. I am sure you will have a very scientific yet clever way to do that. (Btw, guess step 5, head 4 should be Netflix and not spotify.) PS: I would be a paid subscriber of TH-cam red for content such as this :)
Great methodology behind this valuation! Would you mind sharing your excel spreadsheet on it, so that we can put in our own assumptions? Would love to create a sensitivity analysis and look at the trade off between subscriber growth and content cost!
Pls help BC I don’t get it, based on excel sheet I tried to reconcile costs incorporated into calculation with Netflix 2017 K-10 Form and if I understand correctly for existing subs there is allocation of (based on formula) 1,532$ + 1,532$ = 3,064$ (I think it is wrong), for new subs there is allocation of 3,424$ and we have also Tech&Dev 1,053& and Content Costs 6,128$. Total allocated costs are 13,669$ ??? I thought that it should amount to 9,806 (Cash expense) BTW if U correct costs to 9,806 in spreadsheet then the final price is more reasonable, I got 298$
I believe that they amortize the original content costs (as mentioned in the video by the Professor)and amortization is not a cash expense, thereby costs should be higher than cash expense. Idk if that helps or is correct but an idea on how to look at costs
Could someone elaborate on the distinction between content cost expensed and content cost capitalized? I understood from the presentation, that self produced content is capitalized and licensed content is expensed, correct? Thank you to the professor for your efforts, the presentation was very helpful. Kind Regards, Farid
ofc i am not the person you addressed the question to, but i think its not going to be that big of a deal, since we have already seen that digital piracy is relatively easy to handle given the case of Kinox.to. This sites just become to obvious to regulatory entities as they grow in my point of view
Great video professor! I was wondering how you began to think about the dimensions to approach valuing netfix? I'm asking so I can apply such thinking to other companies as well.
Watch more of his videos, especially those in which he values "users/ subscribers" etc. Amazon, Spotify, Uber etc.. There is no one size fits all way, but a push in the right direction to help you shape your thinking!. All the best
Had to pause midway just to say this is another really great video Aswath. Thanks so much for putting in the time. I learn a ton from your content and I'm sure others do too. Really appreciate your hard work and commitment to education. Not gonna lie, I'm glad you couldn't sleep when you arrived in India because review of Netflix is dope. =P
Professor Damodaran is just one of a kind..totally agree with you!
great video. Thanks for the slides included they are really helpfull
Such a great way to value these companies. Bottom up instead of top down.
very grateful, Professor, for your views, slides and spreadsheet...
Thanks Dr. Damodaran. I always enjoy your articulated explanations of valuation on finance.
Great session Professor. 22 minutes of learning for me.
Hello professor, will you do an updated 2020 version of this analysis?
Pure Gold
Assuming fixed costs as variable ones does not look smart to me...Can we agree that just saying "I assume 15% growth for the first 5 years and 10% after..." is total nonsense?...is a specific guess that has no substance behind......looks to me classic professor attitude...numbers and spreadsheets to look accurate and scientific without any common sense behind...
"3AM in Mumbai" - would be a great rap song
17:00 You get a value of Equity per share of USD 172.82 "(...) well below the stock price at the time."
But when I look at Netflix' chart at the date of the video Apr. 16, 2018, I get a per share price of USD 327.77. How is this possible?
Thank you Professor
Been staring at this model for hours, dont know how 31,674 is calculated 😂 15:05
This is much more relevant now (2022/05/11) . Seems now it's at fair value $166
Revisiting after NFLX lost 35% in one day.
Thump up to the 3am jet lag posting before I even start to listen!!
Great content! I like the comparison with Spotify in the end.
Anybody reading No rules rules?
Welp this definitely needs an update
Thank you
hi one simple question. i see in the 2017 annual reports revenue of 11,7 billions . if divide 11,7 billion for 117,6 million subscribers you don't obtain 113 dollars as revenue/subscribers . what do i do wrong?
Thank you!
Great valuation, but the market is much much more optimistic about value per share. Seems like 2018 is a year when fundamentals were crushed and forgotten. 412 right now
Your knowledge and simple way to explain things empowers individual like me. Please kindly keep posting videos. Thank you and Namaste from Toronto. Sincerely, your virtual student 😊
Great, as usual. Thanks a ton for this.Would love to go through valuation of disney. Wondering how would you dis aggregate or aggregate values resulting from the same IP across different verticals like theme parks & merchandising. I am sure you will have a very scientific yet clever way to do that. (Btw, guess step 5, head 4 should be Netflix and not spotify.) PS: I would be a paid subscriber of TH-cam red for content such as this :)
Professor, Don't you think Netflix is bound to have ads in the future? How will that change the game? Thank you for the presentation.
Great methodology behind this valuation! Would you mind sharing your excel spreadsheet on it, so that we can put in our own assumptions? Would love to create a sensitivity analysis and look at the trade off between subscriber growth and content cost!
It's a big pleasure to learn from professor Damodaran. Your website always helps me with valuation.
Why is it unrealistic to assume that none of the content cost is subscriber related? Thanks for the nice valuation.
Sir can u pls do an video abt indian stock market!! ...
Pls help BC I don’t get it, based on excel sheet I tried to reconcile costs incorporated into calculation with Netflix 2017 K-10 Form and if I understand correctly for existing subs there is allocation of (based on formula) 1,532$ + 1,532$ = 3,064$ (I think it is wrong), for new subs there is allocation of 3,424$ and we have also Tech&Dev 1,053& and Content Costs 6,128$. Total allocated costs are 13,669$ ??? I thought that it should amount to 9,806 (Cash expense)
BTW if U correct costs to 9,806 in spreadsheet then the final price is more reasonable, I got 298$
I believe that they amortize the original content costs (as mentioned in the video by the Professor)and amortization is not a cash expense, thereby costs should be higher than cash expense. Idk if that helps or is correct but an idea on how to look at costs
DAMODARAN, THE GOD OF EQUITY VALUATION!!
Could someone elaborate on the distinction between content cost expensed and content cost capitalized? I understood from the presentation, that self produced content is capitalized and licensed content is expensed, correct?
Thank you to the professor for your efforts, the presentation was very helpful.
Kind Regards, Farid
Yes, I believe that is correct. That's what he said.
Prof. What do you think about digital piracy of content and how it shall impact Netflix?
ofc i am not the person you addressed the question to, but i think its not going to be that big of a deal, since we have already seen that digital piracy is relatively easy to handle given the case of Kinox.to. This sites just become to obvious to regulatory entities as they grow in my point of view
Thanks sir.. for your hardwork..
Great stuff !
FANG r down, Netflix stock is down 13% and dies in India.
Great video professor! I was wondering how you began to think about the dimensions to approach valuing netfix? I'm asking so I can apply such thinking to other companies as well.
Watch more of his videos, especially those in which he values "users/ subscribers" etc. Amazon, Spotify, Uber etc..
There is no one size fits all way, but a push in the right direction to help you shape your thinking!. All the best
They also have a lot of rights for merchandise, theme parks etc they could start to monetize over time.
yeah, his ideas I was shamelessly quoting =)