NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to NFLX. NFLX was compared to 72 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making NFLX a very profitable company, without any liquidiy or solvency issues. NFLX is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, NFLX could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
NFLX had positive earnings in the past year.
NFLX had a positive operating cash flow in the past year.
Each year in the past 5 years NFLX has been profitable.
Each year in the past 5 years NFLX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NFLX (17.80%) is better than 97.22% of its industry peers.
NFLX has a better Return On Equity (38.58%) than 93.06% of its industry peers.
NFLX has a Return On Invested Capital of 22.93%. This is amongst the best in the industry. NFLX outperforms 97.22% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NFLX is significantly below the industry average of 22.90%.
The 3 year average ROIC (16.17%) for NFLX is below the current ROIC(22.93%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.8% | ||
| ROE | 38.58% | ||
| ROIC | 22.93% |
ROA(3y)12.2%
ROA(5y)11.02%
ROE(3y)27.7%
ROE(5y)28.07%
ROIC(3y)16.17%
ROIC(5y)15.85%
1.3 Margins
NFLX has a better Profit Margin (23.07%) than 94.44% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX has a better Operating Margin (27.71%) than 97.22% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
NFLX has a Gross Margin (46.92%) which is comparable to the rest of the industry.
NFLX's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.71% | ||
| PM (TTM) | 23.07% | ||
| GM | 46.92% |
OM growth 3Y8.59%
OM growth 5Y15.63%
PM growth 3Y9.04%
PM growth 5Y19.25%
GM growth 3Y3.42%
GM growth 5Y3.77%
2. Health
2.1 Basic Checks
NFLX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NFLX has less shares outstanding than it did 1 year ago.
The number of shares outstanding for NFLX has been reduced compared to 5 years ago.
NFLX has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 13.54 indicates that NFLX is not in any danger for bankruptcy at the moment.
The Altman-Z score of NFLX (13.54) is better than 97.22% of its industry peers.
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 fine compared to the rest of the industry. NFLX outperforms 76.39% of its industry peers.
NFLX has a Debt/Equity ratio of 0.58. This is a neutral value indicating NFLX is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.58, NFLX is in line with its industry, outperforming 47.22% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.02 | ||
| Altman-Z | 13.54 |
ROIC/WACC2.56
WACC8.96%
2.3 Liquidity
A Current Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX has a Current ratio of 1.20. This is comparable to the rest of the industry: NFLX outperforms 59.72% of its industry peers.
A Quick Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX's Quick ratio of 1.20 is fine compared to the rest of the industry. NFLX outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.84%, which is quite impressive.
Measured over the past years, NFLX shows a very strong growth in Earnings Per Share. The EPS has been growing by 36.86% on average per year.
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 15.00% in the last year.
The Revenue has been growing by 14.11% on average over the past years. This is quite good.
EPS 1Y (TTM)46.84%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%25.19%
Revenue 1Y (TTM)15%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%12.51%
3.2 Future
The Earnings Per Share is expected to grow by 19.80% on average over the next years. This is quite good.
The Revenue is expected to grow by 11.04% on average over the next years. This is quite good.
EPS Next Y31.11%
EPS Next 2Y26.05%
EPS Next 3Y24.33%
EPS Next 5Y19.8%
Revenue Next Year14.35%
Revenue Next 2Y13.25%
Revenue Next 3Y12.49%
Revenue Next 5Y11.04%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 57.78, which means the current valuation is very expensive for NFLX.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than the industry average as 72.22% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.55. NFLX is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 38.81, the valuation of NFLX can be described as expensive.
Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than 62.50% of the companies in the same industry.
NFLX is valuated expensively when we compare the Price/Forward Earnings ratio to 22.40, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.78 | ||
| Fwd PE | 38.81 |
4.2 Price Multiples
62.50% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as NFLX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 69.88 | ||
| EV/EBITDA | 19.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NFLX does not grow enough to justify the current Price/Earnings ratio.
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 24.33% in the coming years.
PEG (NY)1.86
PEG (5Y)1.57
EPS Next 2Y26.05%
EPS Next 3Y24.33%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:NFLX (6/12/2025, 11:05:06 AM)
1222.59
+2.71 (+0.22%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.17%
Inst Owner Change2.24%
Ins Owners0.03%
Ins Owner Change3.12%
Market Cap520.30B
Analysts80.7
Price Target1179.37 (-3.54%)
Short Float %1.92%
Short Ratio1.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.61%
Min EPS beat(2)-0.27%
Max EPS beat(2)13.49%
EPS beat(4)3
Avg EPS beat(4)4.4%
Min EPS beat(4)-0.27%
Max EPS beat(4)13.49%
EPS beat(8)6
Avg EPS beat(8)5.37%
EPS beat(12)8
Avg EPS beat(12)1.45%
EPS beat(16)11
Avg EPS beat(16)6.88%
Revenue beat(2)0
Avg Revenue beat(2)-1.18%
Min Revenue beat(2)-1.7%
Max Revenue beat(2)-0.66%
Revenue beat(4)0
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-1.7%
Max Revenue beat(4)-0.66%
Revenue beat(8)0
Avg Revenue beat(8)-1.52%
Revenue beat(12)0
Avg Revenue beat(12)-1.65%
Revenue beat(16)0
Avg Revenue beat(16)-1.76%
PT rev (1m)3.92%
PT rev (3m)8.4%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)11.91%
EPS NY rev (1m)2.44%
EPS NY rev (3m)2.94%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.78 | ||
| Fwd PE | 38.81 | ||
| P/S | 12.95 | ||
| P/FCF | 69.88 | ||
| P/OCF | 65.54 | ||
| P/B | 21.65 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.5 |
EPS(TTM)21.16
EY1.73%
EPS(NY)31.51
Fwd EY2.58%
FCF(TTM)17.5
FCFY1.43%
OCF(TTM)18.65
OCFY1.53%
SpS94.4
BVpS56.46
TBVpS-18.83
PEG (NY)1.86
PEG (5Y)1.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.8% | ||
| ROE | 38.58% | ||
| ROCE | 26.27% | ||
| ROIC | 22.93% | ||
| ROICexc | 28.58% | ||
| ROICexgc | 496.42% | ||
| OM | 27.71% | ||
| PM (TTM) | 23.07% | ||
| GM | 46.92% | ||
| FCFM | 18.53% |
ROA(3y)12.2%
ROA(5y)11.02%
ROE(3y)27.7%
ROE(5y)28.07%
ROIC(3y)16.17%
ROIC(5y)15.85%
ROICexc(3y)20.02%
ROICexc(5y)19.87%
ROICexgc(3y)637.19%
ROICexgc(5y)N/A
ROCE(3y)18.53%
ROCE(5y)18.16%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y14.95%
ROICexc growth 5Y21.57%
OM growth 3Y8.59%
OM growth 5Y15.63%
PM growth 3Y9.04%
PM growth 5Y19.25%
GM growth 3Y3.42%
GM growth 5Y3.77%
F-Score8
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.02 | ||
| Debt/EBITDA | 0.52 | ||
| Cap/Depr | 3.12% | ||
| Cap/Sales | 1.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 29.5% | ||
| Profit Quality | 80.32% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 13.54 |
F-Score8
WACC8.96%
ROIC/WACC2.56
Cap/Depr(3y)2.68%
Cap/Depr(5y)3.36%
Cap/Sales(3y)1.15%
Cap/Sales(5y)1.44%
Profit Quality(3y)81.18%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)46.84%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%25.19%
EPS Next Y31.11%
EPS Next 2Y26.05%
EPS Next 3Y24.33%
EPS Next 5Y19.8%
Revenue 1Y (TTM)15%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%12.51%
Revenue Next Year14.35%
Revenue Next 2Y13.25%
Revenue Next 3Y12.49%
Revenue Next 5Y11.04%
EBIT growth 1Y41.41%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year33.47%
EBIT Next 3Y22.92%
EBIT Next 5Y19.08%
FCF growth 1Y153.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y141.85%
OCF growth 3Y165.66%
OCF growth 5YN/A