Single Stocks: NetFlix - 2

I've already posted about NetFlix just about a week ago. I forgot that I had saved some additional information about the company, and its valuation:

On the 25th of Jan, Netflix released its financial results for the fourth quarter of 2010 and of no surprise to anyone who was paying attention last year it did quite well by passing 20 million subscribers (see EnGadgets post).

At about the same time, NetFlix's market cap was about $12 billion. What does this mean in terms of valuation per subscriber? The maths are easy to do: $12000/20 = $600. Each subscriber is valued $600.

NetFlix's subscription costs $7.99 a month.

NetFlix's EBITDA is about $300 million, we're not even talking about net profits. Yet, 300/20 = 15$. It means that out of the 8*12 = $96 worth of yearly subscription, NetFlix only make profits on the last 2 months.

So, for a subscriber to bring in $600 worth of profits, he/she needs to keep the subscription for 600/15 = 40 years.

How realistic is that?

Even though NetFlix doubles its user base, then each subscriber need to remain with them for 20 years.
Then if NetFlix quadruple its user base in the next couple of years (100% growth per year — it's becoming very unrealistic) then each subscriber needs to keep on paying for 10 years for the current valuation to be credible.

I'm not a stock analyst, but simple and basic calculations show just how much this stock is overvalued. I guess with a PER of 80, this was already obvious, but I wanted to put this huge number into perspective with actual facts.