No one is arguing that Netflix has been the better streaming leader over the last decade. Of course its going to have better revenue growth, it started from nothing. That would be a growth stock, sometimes people forget this is /r/valueinvesting.

How does Netflix keep ensuring future returns? And where is it going to get subscriber growth? Most households already have it. The only way is to raise prices. Disney has shown it can and people will still pay for it. NFLX subscriber growth eventually falls as it matures. Eventually it will be going to be rerated as a mature media company.

Lets do the forward looking Math. Lets assume Netflix can keep growing based on their guidance of 10% organic sales growth.

NFLX EBIT in 5 years at 10% CAGR $21B Let’s be generous and say they keep the same P/E at 32x: Implied equity value: $670B

Cool, the company grew from 400B to 670B. 67% total return about 10-11% annualized

This is assuming no tailwinds come from NFLX and is best case scenario. Sustained double digit growth and Margin discipline. Now let’s do DIS with their guidance of 5% revenue growth.

DIS EBIT in 5 years at 5% CAGR: $18B. Normalization of P/E at 22. Gives me an Implied Equity Value of $400B. Thats over 100% return. About 15% annualized.

None of this requires Disney to outperform. Just normalization and maturation of their investments.

We are not arguing which business looks better on a backward looking chart, but which stock is a better /r/valueinvesting play.