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While growth is established for NASDAQ:NFLX, the stock's valuation remains reasonable.

By Mill Chart

Last update: Mar 11, 2024

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 Insights: NASDAQ:NFLX

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:NFLX scores a 7 out of 10:

  • 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.
  • The Revenue has been growing by 16.38% on average over the past years. This is quite good.
  • Based on estimates for the next years, NFLX will show a very strong growth in Earnings Per Share. The EPS will grow by 22.73% on average per year.
  • NFLX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.31% yearly.

How We Gauge Valuation for NASDAQ:NFLX

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:NFLX scores a 5 out of 10:

  • Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 72.00% of the companies in the same industry.
  • Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than the industry average as 72.00% of the companies are valued more expensively.
  • Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than the industry average as 74.67% of the companies are valued more expensively.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 73.33% of the companies listed in the same industry.
  • NFLX has an outstanding profitability rating, which may justify a higher PE ratio.
  • A more expensive valuation may be justified as NFLX's earnings are expected to grow with 28.50% in the coming years.

Health Insights: NASDAQ:NFLX

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:NFLX scores a 8 out of 10:

  • NFLX has an Altman-Z score of 7.42. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
  • With an excellent Altman-Z score value of 7.42, NFLX belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
  • The Debt to FCF ratio of NFLX is 2.10, which is a good value as it means it would take NFLX, 2.10 years of fcf income to pay off all of its debts.
  • NFLX has a Debt to FCF ratio of 2.10. This is amongst the best in the industry. NFLX outperforms 89.33% of its industry peers.
  • Even though the debt/equity ratio score it not favorable for NFLX, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
  • NFLX does not score too well on the current and quick ratio evaluation. However, as it has 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's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:NFLX, the assigned 8 is a significant indicator of profitability:

  • NFLX has a better Return On Assets (11.10%) than 93.33% of its industry peers.
  • NFLX has a better Return On Equity (26.27%) than 94.67% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 14.43%, NFLX belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
  • The last Return On Invested Capital (14.43%) for NFLX is above the 3 year average (13.36%), which is a sign of increasing profitability.
  • Looking at the Profit Margin, with a value of 16.04%, NFLX belongs to the top of the industry, outperforming 90.67% of the companies in the same industry.
  • NFLX's Profit Margin has improved in the last couple of years.
  • NFLX's Operating Margin of 20.62% is amongst the best of the industry. NFLX outperforms 92.00% of its industry peers.
  • NFLX's Operating Margin has improved in the last couple of years.
  • In the last couple of years the Gross Margin of NFLX has grown nicely.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of NFLX contains the most current fundamental analsysis.

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.

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NETFLIX INC

NASDAQ:NFLX (5/17/2024, 7:15:59 PM)

After market: 621.49 +0.39 (+0.06%)

621.1

+10.58 (+1.73%)

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News Image3 days ago - ChartmillInvestors seeking growth at a reasonable cost should explore NASDAQ:NFLX.

Looking for growth without the hefty price tag? Consider NETFLIX INC (NASDAQ:NFLX).

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