Intended for MBA, this case concerns the assessment of Netflix, Inc., which was the largest subscription service movie rental online United States in early 2009. After examining the historical financial performance and customer relationship of Netflix, this case presents three approaches to valuation of the company in early 2009. The first is a cash flow analysis of the update on the proforma projections of revenues, earnings and cash flow business. The second approach is to determine whether the current market value of Netflix was reasonable by comparing the ratios of selected companies with comparable companies. The final approach is based on the assumption that the value of company Netflix (EV) is the sum of current and future subscribers (reduced current values, to be exact). There is also a spreadsheet available to students (UV4344).
by
Phillip E. Pfeifer,
Robert M. Conroy
Source: Darden School of Business
13 pages.
Release Date: December 21, 2009. Prod #: UV3928-PDF-ENG
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