**There is no universal maximum “healthy” P/E.** A stock is overvalued when its price requires future earnings and cash flows that are implausible for the risk involved. A reasonable P/E depends on growth, how much investment that growth requires, and your required return. [NYU’s Aswath Damodaran explains these relationships](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/invfables/peratio.htm).

Your point about growth being limited is crucial: **a valuation should explicitly assume that rapid growth eventually slows.**

One way to interpret P/E is its inverse, the *earnings yield*:

| P/E | Annual earnings ÷ purchase price |
|---:|---:|
| 10 | 10% |
| 20 | 5% |
| 50 | 2% |
| 200 | 0.5% |

These are accounting earnings yields; the cash shareholders actually receive can differ substantially.

For a hypothetical business with flat earnings that can distribute all its profits, a required annual return of 10% implies a fair P/E of 10. A required return of 5% implies 20. Growth can justify paying more, but you must account for the money needed to fund it.

**At 200 times earnings, quantify what has to happen.** Suppose you buy at 200× today’s earnings, hold for ten years, receive no dividends, and sell at 20× earnings:

- Earnings must increase **tenfold** just to leave the share price unchanged—about **26% annual earnings-per-share growth**.
- To earn **10% annually**, earnings must increase about **26-fold**—roughly **38% annual growth for ten years**.

Those are illustrative calculations, with 20× as an assumed exit valuation. They show how demanding a 200× purchase price can be.

There is another complication: **very small current earnings can produce an enormous P/E.** A $100 stock earning $0.50 per share has a P/E of 200. If sustainable earnings recover to $5, the same price represents 20× earnings. Establishing sustainable earnings is therefore essential. Equally, a low P/E can be misleading when profits are temporarily at a cyclical peak.

On Netflix specifically, the figure you quoted appears to come from a different date or earnings basis. The [Stock Analysis page I checked](https://stockanalysis.com/stocks/nflx/financials/ratios/?p=trailing), displaying an October 6, 2026 closing price, reports approximately **21.6× trailing earnings and 19.9× forward earnings**.

For a stock actually trading at 200×, I would require a detailed, credible earnings forecast before considering the price reasonable. “Growth potential” needs a growth rate, a duration, and an estimate of what happens when growth slows.