Netflix (NASDAQ: NFLX) has been a major market winner for a long time, as its stock has skyrocketed nearly sixfold over the past five years. With a market capitalization of $235 billion, Netflix's price-to-earnings (P/E) ratio currently stands at 87, which is high by any measure.
While the company's been the primary beneficiary of the shift to over-the-top (OTT) streaming, investors are wondering if the stock is too risky today, considering the many years of its outperformance and the competition that continues to heat up. Let's find out if this is the case.
Although Netflix's business was already booming in the years leading up to the coronavirus pandemic, it certainly received an extra boost last year. After adding 78 million subscribers in the prior three years combined, the business added a whopping 37 million members in 2020 alone. The huge bump last year was certainly fueled by people stuck inside with nothing else to do.
Source Fool.com