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Investors seeking growth at a reasonable cost should explore NASDAQ:NFLX.

By Mill Chart

Last update: May 16, 2024

Our stock screener has singled out NETFLIX INC (NASDAQ:NFLX) as an attractive growth opportunity. NASDAQ:NFLX is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Evaluating Growth: NASDAQ:NFLX

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:NFLX was assigned a score of 8 for growth:

  • NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.95%, which is quite impressive.
  • The Earnings Per Share has been growing by 34.98% on average over the past years. This is a very strong growth
  • The Revenue has grown by 9.47% in the past year. This is quite good.
  • The Revenue has been growing by 16.38% on average over the past years. This is quite good.
  • The Earnings Per Share is expected to grow by 24.27% on average over the next years. This is a very strong growth
  • The Revenue is expected to grow by 10.94% on average over the next years. This is quite good.

Valuation Analysis for NASDAQ:NFLX

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:NFLX has received a 5 out of 10:

  • Compared to the rest of the industry, the Price/Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 71.05% of the companies listed in the same industry.
  • NFLX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 75.00% of the companies in the same industry.
  • Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than the industry average as 76.32% of the companies are valued more expensively.
  • 73.68% of the companies in the same industry are more expensive than NFLX, based on the Price/Free Cash Flow ratio.
  • NFLX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • NFLX has an outstanding profitability rating, which may justify a higher PE ratio.
  • NFLX's earnings are expected to grow with 29.08% in the coming years. This may justify a more expensive valuation.

Health Analysis for NASDAQ:NFLX

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:NFLX has earned a 8 out of 10:

  • NFLX has an Altman-Z score of 7.75. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
  • With an excellent Altman-Z score value of 7.75, NFLX belongs to the best of the industry, outperforming 98.68% of the companies in the same industry.
  • NFLX has a debt to FCF ratio of 2.02. This is a good value and a sign of high solvency as NFLX would need 2.02 years to pay back of all of its debts.
  • NFLX's Debt to FCF ratio of 2.02 is amongst the best of the industry. NFLX outperforms 89.47% 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.

What does the Profitability looks like for NASDAQ:NFLX

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:

  • The Return On Assets of NFLX (13.18%) is better than 96.05% of its industry peers.
  • Looking at the Return On Equity, with a value of 30.12%, NFLX belongs to the top of the industry, outperforming 94.74% of the companies in the same industry.
  • With an excellent Return On Invested Capital value of 16.47%, NFLX belongs to the best of the industry, outperforming 97.37% of the companies in the same industry.
  • The 3 year average ROIC (13.36%) for NFLX is below the current ROIC(16.47%), indicating increased profibility in the last year.
  • NFLX has a Profit Margin of 18.42%. This is amongst the best in the industry. NFLX outperforms 96.05% of its industry peers.
  • In the last couple of years the Profit Margin of NFLX has grown nicely.
  • NFLX has a Operating Margin of 22.54%. This is amongst the best in the industry. NFLX outperforms 94.74% 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.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of NFLX

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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NETFLIX INC

NASDAQ:NFLX (5/30/2024, 8:51:04 AM)

654.4

-0.22 (-0.03%)

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