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The Netflix stock price is down another 4.8% in early trading this morning (Friday) and has now dipped 13.3% since Aug. 6.
Yesterday, shares of Netflix Inc. (Nasdaq: NFLX) were down 7.8% as many tech stocks felt the heat of the market's sell-off. On Thursday, the Dow Jones Industrial Average fell more than 350 points, and the Nasdaq dropped 141 points.
But the Netflix stock price had the largest drop. NFLX shares were trading just above $106 at 10:00 a.m. Thursday.
Despite the dip, the Netflix stock price has still gained more than 119% in 2015. In the last three months, shares are up 20.1%. The Dow Jones has fallen 5.9% in 2015 and 8.3% in that time.
But even after this week's sell-off, Netflix stock is still one of the most overvalued stocks on the market.
Here's a look at some of the troubling figures…
Why the Netflix Stock Price Is Overvalued
Many investors look at NFLX stock as more affordable now because the company recently completed a 7-for-1 stock split. That brought share prices down from about $700 to roughly $100.
But it's important to remember that while the price of Netflix shares was lowered by the split, their value has remained the same.
Right now, Netflix's trailing P/E ratio is 237, according to Yahoo! Finance. For comparison, Apple Inc. (Nasdaq: AAPL) has a P/E ratio of 12.7, and Microsoft Corp. (Nasdaq: MSFT) has a P/E ratio of 30.4.
Another good barometer for a stock's value is its price/earnings to growth (PEG) ratio. A PEG ratio of 1.0 is considered fair value for a company. Right now, Netflix has a PEG ratio of 23.4. That means it is heavily overvalued.
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