This Is the One Reason I Might Buy Netflix Stock Again

For a number of years, I've been steering clear of Netflix (NASDAQ: NFLX) stock. With its price skyrocketing 380% over the last trailing five-year stretch, it goes without saying that my decision has been a mistake. But my reasons for avoiding the clear-cut leader in TV streaming might be changing, and if the trend holds I'll consider making a purchase after a long absence in my portfolio.

My reasons for ignoring Netflix stock have little to do with how "expensive" the stock is. At 9.2 and 78 times trailing 12-month sales and earnings per share, respectively, the entertainment stock looks like a reasonable value given its growth using these two metrics alone -- and has for some time, in my opinion. But the issue is that while Netflix reported positive earnings, it wasn't really profitable yet. Free cash flow (revenue less cash operating expenses and capital expenditures) has been negative for years -- until the pandemic hit.