When it comes to high-growth technology stocks, Wall Street often advises investors to look beyond the short-term numbers — especially when they are bad. In the case of , the numbers look fine right now, but there is still a fundamental question about the streaming video service‘s long-term future that should give investors pause.

The greatest innovation that Netflix is capable of producing is already in its past, according to some tech experts.

“Think about how disruptive they can be. … Think about , , Google []. … They will change the world dramatically, so it will be easier to build high-multiple models for them,” said Gene Munster, managing partner of tech investment firm Loup Ventures. “In the case of Netflix, they won‘t change the world again … and I struggle with that question,” Munster said.

The tech investor said the success Netflix has had in capturing a significant portion of the legacy broadcast television audience through its online streaming service does not equate to an outsized multiple over the next decade.

The recent earnings and performance of Netflix shares indicate that if the tech investor turns out to be right, a lot of Netflix shareholders may be left holding the bag. Netflix has outperformed the FAANGs (Facebook, Apple, Amazon and Google‘s parent, Alphabet) so far in 2019. It was trading at a price-to-earnings ratio near 130, as of Jan. 24. Apple was trading at a P/E of roughly 13; Facebook at 21; Alphabet at 40. Amazon is the closest to Netflix, with a P/E just over 100.


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