Netflix (NFLX) Strong Three-Year Run Could be at Risk as Valuation Remains Rich

Netflix (Nasdaq: NFLX) shares are on watch following cautious commentary in the WSJ over the weekend.

Shares of Netflix are up more than 600 percent over the last three years, though they are flat with where they were trading last summer.

When Netflix posts Q4 results today, analysts are looking for EPS of $0.02, versus $0.10 reported in the same period last year. The company itself is looking for 5.15 million new subscribers for the quarter.

Streaming content costs have risen to over $10 billion in Q315, the second straight quarter over the $10 billion level, making acquisition of new customers increasingly more expensive.

Shares of Netflix trade for over 400 times FY16 EPS estimates, meaning anything short of spectacular could cause a pullback in the name. The stock is indicated higher early Tuesday.

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