The Netflix share price has passed $700, giving it a market capitalisation of over $300 billion. That means the market sees Netflix as being worth almost twice as much as Disney, which has been around for over a hundred years and includes the Disney+ online offering as well as the Walt Disney Studios, ABC Television, and ESPN, not to mention theme parks, resorts, and cruise ships.
Netflix ended August 2024 with a share price over $700, which was its highest valuation to date. That was up from around $180 in May 2022, after falling from just under $700 back in October 2021.
To put that in perspective, the Walt Disney Company was trading at just over $90, giving it a market capitalisation of over $160 billion, down from a peak of just under $200 a share in March 2021.
Netflix had a price to earnings ratio of 48.43 compared to 34.66 for Disney, suggesting that investors are willing to pay more for each dollar of earnings, presumably on expectation of higher future growth.
For further context, Netflix is apparently worth more than Comcast, Sony, Warner Bros Discovery and Paramount combined.
NBCUniversal is now owned by Comcast Corp, which has a market capitalisation of over $150 billion.
Sony Pictures is part of Sony Group, which has a market capitalisation approaching $120 billion.
Meanwhile, Warner Bros Discovery was bumping along at just under $8, with a market capitalisation of under $20 billion.
Paramount was at around $10 a share, with a market capitalisation of under $8 billion.
Market capitalisation represents the market valuation of the total equity of a company and is influenced by market sentiment. It does not necessarily reflect the intrinsic value, assets, liabilities, or future earning potential of a company.
The market sentiment is clearly supportive of the potential for Netflix, but some might question whether it is worth more than the combination of the major Hollywood studios with their extensive back catalogues.