Valuation of Netflix, Inc. using Selected Valuation Methods

Elena Matevosyan

Master's thesis

Valuation of the Selected Company using Selected Valuation Methods

Abstract:

The main aim of the thesis is to determine the value of Netflix, Inc. which is publicly traded on the NASDAQ stock exchange, applying selected valuation methods. The thesis consists of two parts: theoretical and practical. In the theoretical part critical literature review of the core of the business valuation and most commonly used valuation approaches is performed. While practical part of the thesis aims to calculate Netflix's value using selected valuation methods, namely DCF and EVA. In order to use these approaches, the author conducts company's analysis, including business and industry overview, analysis of core competitors, financial and risk analysis, analysis of corporate governance. Moreover, the author conducts short analysis of the COVID-19 influence on Netflix's future performance. After getting the company's value, the author of the thesis compares results from different valuation approaches and gives some recommendations. The result of the thesis is Netflix's value, which can be used by either management of the company or external users such as potential investors, debtors, public sector or potential employees.

Abstract:

The main aim of the thesis is to determine the value of Netflix, Inc. which is publicly traded on the NASDAQ stock exchange, applying selected valuation methods. The thesis consists of two parts: theoretical and practical. In the theoretical part critical literature review of the core of the business valuation and most commonly used valuation approaches is performed. While practical part of the thesis aims to calculate Netflix's value using selected valuation methods, namely DCF and EVA. In order to use these approaches, the author conducts company's analysis, including business and industry overview, analysis of core competitors, financial and risk analysis, analysis of corporate governance. Moreover, the author conducts short analysis of the COVID-19 influence on Netflix's future performance. After getting the company's value, the author of the thesis compares results from different valuation approaches and gives some recommendations. The result of the thesis is Netflix's value, which can be used by either management of the company or external users such as potential investors, debtors, public sector or potential employees.

Keywords

DCF, EVA, valuation approach, company's value

Language used: English

Date on which the thesis was submitted / produced: 16. 6. 2020

Thesis defence

• Supervisor: Ing. Jana Vychytilová, Ph.D.

Tomas Bata University in Zlín

Faculty of Management and Economics

Master programme / field:
Economic Policy and Administration / Finance