Suntrust Robinson's Bob Peck: 'Stock Split Doesn't Change The Actual Valuation, Netflix Is Still An Expensive Stock'

Netflix, Inc. NFLX announced on Tuesday that it has approved a seven-for-one stock split. Following this news, shares of the company surged in after-hours trading and opened strong on Wednesday at their all-time highs.

Although the market is cheering the stock split, a number of analysts including RBC's Mark Mahaney and Suntrust Robinson's Bob Peck are concerned about the rising valuation of the company.

Peck was on CNBC recently to explain why even though he likes Netflix, he is having a hard time putting investors in the name.

Love The Stock, But Overvalued

"We truly love the Netflix story," Peck began. "They are disrupting linear TV, they are expanding internationally getting into Japan getting into China, trying new formats like Crouching Tiger coming up this August, fantastic story."

Peck continued, "The tough problem we have is that it currently trades at around 100 times EBITDA this year or 75 times next year or 40 plus times EBITDA 2017. That's for a company growing top-line at around 20 percent. So, while we absolutely love the story, we have a tough time putting in investors in it at these levels."

Still An Expensive Stock Regardless Of Split

Peck was asked why did Netflix went for a seven-for-one stock split and will it have any impact on the valuations. He replied, "I think it is to make the shares more affordable [and] it has to release the options for the employees as well...It doesn't change the actual valuation, it's still an expensive stock."