Netflix's valuation hinges on international growth, but breaking into India hasn't been easy

Netflix has more international than US subscribers, but it's still struggling in India — here's why

Netflix is currently valued much higher than other media companies. Despite a share pullback in recent months from more than $400 to about $285, Netflix has a trailing price-to-earnings ratio of more than 100 and an enterprise value-to-EBITDA ratio of about 70. For comparison, Disney has a P/E ratio of about 14 and an EV-to-EBITDA ratio of about 11. Viacom's valuation ratios are both around 7.

This gaudy valuation is largely predicated on its international growth forecast. Breaking into India is critical for the company to double or triple its subscribers over the next 10 to 15 years, as many analysts have estimated. But Netflix hasn't had an easy time spreading through India since it launched there in 2016. Faced with competition from local players and Amazon Prime Video, Netflix is facing an uncertain future in a country with more than 1.3 billion people.

NEW DELHI, INDIA - MARCH 6: (L-R) Sandeep Kataria, Director Commercial Vodafone India; Reed Hastings, Co founder and CEO, Netflix and Himanshu Patil , COO Videocone d2h Limited at Netflix's Multi-Platform Parterships Annoucement on March 6, 2017 in New Delhi, India. 
Sushil Kumar | Hindustan Times | Getty Images