Offshore
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EndGame Macro
More Sellers, Fewer Buyers And a Market That Can’t Clear
Buyers didn’t suddenly lose interest in owning homes. They lost the ability to make the monthly payment work. At these prices and these rates, the math just doesn’t clear so buyers step back. That’s why the buyer line keeps sliding. It’s not panic. It’s affordability.
Sellers are a different story. Many are listing because life forces it with job moves, divorces, rising taxes and insurance, aging in place becoming expensive. But most are still anchored to 2021–22 prices, when everything felt easy. So listings rise without matching demand, and the gap blows out.
Why This Isn’t A Crash… Yet
Historically, when housing gets stuck like this, the first adjustment isn’t a national collapse. It’s a grind. Volume dries up before prices do. Homes sit longer. Sellers cut quietly. Concessions creep in. Rate buydowns replace price cuts. Some listings get pulled and relisted months later.
Back in 2008 credit broke and forced selling flooded the market. Today, inventory is still well below crisis levels, distressed sales are rare, and years of underbuilding put a floor under prices…at least for now.
Behavior has shifted faster than pricing.
Where Trump’s Comments Actually Fit
Trump is saying the quiet part out loud that housing is caught between two competing realities. Homeowners want prices to stay high because that’s their net worth. Younger buyers need prices and payments to come down to get in.
Those goals are in conflict. And when he talks about lower rates, a new Fed chair, even floating housing as an “emergency,” while also saying he doesn’t want to knock prices down, that’s the tell.
If the plan is lower rates, keep prices up, you’re not fixing housing. You’re trying to restore affordability without letting the asset deflate. That can work for a while, but it usually turns into a loop where prices stay sticky, payments ease a bit, demand comes back… and the market tightens again.
My View
This gap means housing is shifting from a seller’s market to a buyer’s market in behavior, not yet in pricing.
The real breaking point isn’t the headline number of sellers versus buyers. It’s the labor market. If jobs hold, this becomes a long, frustrating grind with regional repricing and real (inflation adjusted) declines. If jobs crack, the standoff turns into forced selling and that’s when the price floor finally gives way.
For now, this chart isn’t screaming collapse. It’s quietly telling you the old housing playbook is broken and the next one hasn’t been written yet.
tweet
More Sellers, Fewer Buyers And a Market That Can’t Clear
Buyers didn’t suddenly lose interest in owning homes. They lost the ability to make the monthly payment work. At these prices and these rates, the math just doesn’t clear so buyers step back. That’s why the buyer line keeps sliding. It’s not panic. It’s affordability.
Sellers are a different story. Many are listing because life forces it with job moves, divorces, rising taxes and insurance, aging in place becoming expensive. But most are still anchored to 2021–22 prices, when everything felt easy. So listings rise without matching demand, and the gap blows out.
Why This Isn’t A Crash… Yet
Historically, when housing gets stuck like this, the first adjustment isn’t a national collapse. It’s a grind. Volume dries up before prices do. Homes sit longer. Sellers cut quietly. Concessions creep in. Rate buydowns replace price cuts. Some listings get pulled and relisted months later.
Back in 2008 credit broke and forced selling flooded the market. Today, inventory is still well below crisis levels, distressed sales are rare, and years of underbuilding put a floor under prices…at least for now.
Behavior has shifted faster than pricing.
Where Trump’s Comments Actually Fit
Trump is saying the quiet part out loud that housing is caught between two competing realities. Homeowners want prices to stay high because that’s their net worth. Younger buyers need prices and payments to come down to get in.
Those goals are in conflict. And when he talks about lower rates, a new Fed chair, even floating housing as an “emergency,” while also saying he doesn’t want to knock prices down, that’s the tell.
If the plan is lower rates, keep prices up, you’re not fixing housing. You’re trying to restore affordability without letting the asset deflate. That can work for a while, but it usually turns into a loop where prices stay sticky, payments ease a bit, demand comes back… and the market tightens again.
My View
This gap means housing is shifting from a seller’s market to a buyer’s market in behavior, not yet in pricing.
The real breaking point isn’t the headline number of sellers versus buyers. It’s the labor market. If jobs hold, this becomes a long, frustrating grind with regional repricing and real (inflation adjusted) declines. If jobs crack, the standoff turns into forced selling and that’s when the price floor finally gives way.
For now, this chart isn’t screaming collapse. It’s quietly telling you the old housing playbook is broken and the next one hasn’t been written yet.
BREAKING 🚨: U.S. Housing Market
Home Sellers now outnumber Buyers by 530,000, the largest gap ever recorded 🤯 tweet
Offshore
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Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $NFLX 🧘🏽♂️
•NTM P/E Ratio: 30.42x
•3-Year Mean: 34.87x
•NTM FCF Yield: 2.61%
•3-Year Mean: 2.41%
As you can see, $NFLX appears to be trading below fair value
Going forward, investors can expect to receive ~15% MORE in earnings per share & ~8% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $NFLX is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $9.32B
•Long-Term Debt: $14.46B
$NFLX has a strong balance sheet, an A S&P Credit Rating & 13x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2021: 18.2%
•2022: 14.9%
•2023: 18.5%
•2024: 24.3%
•LTM: 29.4%
RETURN ON EQUITY✅
•2021: 38.0%
•2022: 24.5%
•2023: 26.1%
•2024: 38.4%
•LTM: 42.9%
$NFLX has great return metrics, highlighting the financial efficiency of the business
REVENUE✅
•2019: $20.16B
•2025E: $45.09B
•CAGR: 14.36%
FREE CASH FLOW❌➡️✅
•2019: ($3.14B)
•2025E: $9.18B
NORMALIZED EPS✅
•2019: $0.41
•2025E: $2.54
•CAGR: 35.52%
SHARE BUYBACKS✅
•2019 Shares Outstanding: 4.38B
•LTM Shares Outstanding: 4.26B
By reducing its shares outstanding ~3%, $NFLX increased its EPS by ~3% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 48.1%
•LTM Operating Margins: 29.1%
•LTM Net Income Margins: 24.0%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~15% MORE in EPS & ~8% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $NFLX has to grow earnings at a 15.21% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2027 EPS growth over the next few years to be more than the (15.21%) required growth rate:
2025E: $2.54 (28% YoY) *FY Dec
2026E: $3.24 (28% YoY)
2027E: $3.91 (20% YoY)
$NFLX has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $NFLX ends 2027 with $3.91 in EPS & see its CAGR potential assuming different multiples
32x P/E: $125💵 … ~15.6% CAGR
31x P/E: $121💵 … ~13.8% CAGR
30x P/E: $117💵 … ~12.0% CAGR
29x P/E: $113💵 … ~10.1% CAGR
28x P/E: $109💵 … ~8.2% CAGR
27x P/E: $105💵 … ~6.3% CAGR
As you can see, we’d have to assume a >29x multiple for $NFLX to have attractive return potential
At 29x earnings $NFLX has ok CAGR potential
At 30x $NFLX has attractive return potential without assuming any multiple expansion
$NFLX remains the content king — with unmatched scale, global reach, & pricing power
With a long runway ahead & shares modestly undervalued, I consider $NFLX an attractive consideration today at $93💵 (with little margin of safety)
I consider $NFLX a strong consideration with a large margin of safety at $82💵, where I can reasonably expect ~13% CAGR while assuming a more conservative 27x
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️
𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.
𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
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A quality valuation analysis on $NFLX 🧘🏽♂️
•NTM P/E Ratio: 30.42x
•3-Year Mean: 34.87x
•NTM FCF Yield: 2.61%
•3-Year Mean: 2.41%
As you can see, $NFLX appears to be trading below fair value
Going forward, investors can expect to receive ~15% MORE in earnings per share & ~8% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $NFLX is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $9.32B
•Long-Term Debt: $14.46B
$NFLX has a strong balance sheet, an A S&P Credit Rating & 13x FFO Interest Coverage Ratio
RETURN ON CAPITAL✅
•2021: 18.2%
•2022: 14.9%
•2023: 18.5%
•2024: 24.3%
•LTM: 29.4%
RETURN ON EQUITY✅
•2021: 38.0%
•2022: 24.5%
•2023: 26.1%
•2024: 38.4%
•LTM: 42.9%
$NFLX has great return metrics, highlighting the financial efficiency of the business
REVENUE✅
•2019: $20.16B
•2025E: $45.09B
•CAGR: 14.36%
FREE CASH FLOW❌➡️✅
•2019: ($3.14B)
•2025E: $9.18B
NORMALIZED EPS✅
•2019: $0.41
•2025E: $2.54
•CAGR: 35.52%
SHARE BUYBACKS✅
•2019 Shares Outstanding: 4.38B
•LTM Shares Outstanding: 4.26B
By reducing its shares outstanding ~3%, $NFLX increased its EPS by ~3% (assuming 0 growth)
MARGINS✅
•LTM Gross Margins: 48.1%
•LTM Operating Margins: 29.1%
•LTM Net Income Margins: 24.0%
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~15% MORE in EPS & ~8% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $NFLX has to grow earnings at a 15.21% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2027 EPS growth over the next few years to be more than the (15.21%) required growth rate:
2025E: $2.54 (28% YoY) *FY Dec
2026E: $3.24 (28% YoY)
2027E: $3.91 (20% YoY)
$NFLX has an ok track record of meeting analyst estimates ~2 years out, but let’s assume $NFLX ends 2027 with $3.91 in EPS & see its CAGR potential assuming different multiples
32x P/E: $125💵 … ~15.6% CAGR
31x P/E: $121💵 … ~13.8% CAGR
30x P/E: $117💵 … ~12.0% CAGR
29x P/E: $113💵 … ~10.1% CAGR
28x P/E: $109💵 … ~8.2% CAGR
27x P/E: $105💵 … ~6.3% CAGR
As you can see, we’d have to assume a >29x multiple for $NFLX to have attractive return potential
At 29x earnings $NFLX has ok CAGR potential
At 30x $NFLX has attractive return potential without assuming any multiple expansion
$NFLX remains the content king — with unmatched scale, global reach, & pricing power
With a long runway ahead & shares modestly undervalued, I consider $NFLX an attractive consideration today at $93💵 (with little margin of safety)
I consider $NFLX a strong consideration with a large margin of safety at $82💵, where I can reasonably expect ~13% CAGR while assuming a more conservative 27x
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️
𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.
𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
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