Looking for growth without the hefty price tag? Consider NASDAQ:NFLX.

Uncover the potential of NETFLIX INC (NASDAQ:NFLX), a growth stock that our stock screener found to be reasonably priced. NASDAQ:NFLX is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

Growth Analysis for NASDAQ:NFLX

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:NFLX has earned a 7 for growth:

• The Earnings Per Share has grown by an impressive 20.70% over the past year.
• NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.98% yearly.
• Measured over the past years, NFLX shows a quite strong growth in Revenue. The Revenue has been growing by 16.38% on average per year.
• The Earnings Per Share is expected to grow by 22.73% on average over the next years. This is a very strong growth
• Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 10.68% on average per year.

Exploring NASDAQ:NFLX's Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:NFLX was assigned a score of 5 for valuation:

• Compared to the rest of the industry, the Price/Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 76.39% of the companies listed in the same industry.
• 70.83% of the companies in the same industry are more expensive than NFLX, based on the Price/Forward Earnings ratio.
• 75.00% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
• NFLX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 79.17% of the companies in the same industry.
• NFLX has an outstanding profitability rating, which may justify a higher PE ratio.
• NFLX's earnings are expected to grow with 25.48% in the coming years. This may justify a more expensive valuation.

How We Gauge Health for NASDAQ:NFLX

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:NFLX was assigned a score of 8 for health:

• An Altman-Z score of 7.02 indicates that NFLX is not in any danger for bankruptcy at the moment.
• NFLX has a better Altman-Z score (7.02) than 97.22% of its industry peers.
• NFLX has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as NFLX would need 2.10 years to pay back of all of its debts.
• NFLX has a Debt to FCF ratio of 2.10. This is amongst the best in the industry. NFLX outperforms 88.89% of its industry peers.
• Although NFLX does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• The current and quick ratio evaluation for NFLX is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:NFLX, the assigned 9 is noteworthy for profitability:

• The Return On Assets of NFLX (11.10%) is better than 94.44% of its industry peers.
• NFLX has a Return On Equity of 26.27%. This is amongst the best in the industry. NFLX outperforms 94.44% of its industry peers.
• NFLX's Return On Invested Capital of 14.43% is amongst the best of the industry. NFLX outperforms 94.44% of its industry peers.
• NFLX had an Average Return On Invested Capital over the past 3 years of 13.36%. This is above the industry average of 8.71%.
• The 3 year average ROIC (13.36%) for NFLX is below the current ROIC(14.43%), indicating increased profibility in the last year.
• The Profit Margin of NFLX (16.04%) is better than 93.06% of its industry peers.
• NFLX's Profit Margin has improved in the last couple of years.
• The Operating Margin of NFLX (20.62%) is better than 93.06% of its industry peers.
• In the last couple of years the Operating Margin of NFLX has grown nicely.
• NFLX's Gross Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of NFLX for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.