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Netflix (NFLX) reported 4Q22 earnings after the close just now. Net streaming subscribers – its key metric – beat expectations, increasing by 7.66 million. NFLX stock is currently +5% in the after hours.

While the 4Q22 net streaming additions number is much better than expected, the rest of the report – and NFLX’s valuation – leads me to believe that NFLX is now fully valued. 4Q22 EPS of 12 cents means that NFLX earned $9.95/share in 2022. At its current after hours price of ~$330 that’s 33x trailing EPS. Pretty expensive for a company that is past the sweet spot of its growth cycle. In addition, they said that 4Q22 net streaming additions likely pulled forward some subscriber growth and so they’re guiding 1Q23 to only slightly positive.

Taken altogether – while the 7.66 million net streaming additions is impressive – the balance of my analysis suggests to me that now is a good time to take profits.

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