NETFLIX INC (NFLX) Stock Fundamental Analysis
USA - NASDAQ:NFLX - US64110L1061 - Common Stock
1238.19 USD
-0.37 (-0.03%)
Taking everything into account, NFLX scores 7 out of 10 in our fundamental rating. NFLX was compared to 80 industry peers in the Entertainment industry. NFLX gets an excellent profitability rating and is at the same time showing great financial health properties. NFLX is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings could make NFLX a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
NFLX had positive earnings in the past year.
In the past year NFLX had a positive cash flow from operations.
In the past 5 years NFLX has always been profitable.
NFLX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NFLX has a better Return On Assets (19.30%) than 95.00% of its industry peers.
NFLX has a Return On Equity of 41.07%. This is amongst the best in the industry. NFLX outperforms 93.75% of its industry peers.
NFLX's Return On Invested Capital of 24.32% is amongst the best of the industry. NFLX outperforms 98.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NFLX is significantly above the industry average of 9.23%.
The 3 year average ROIC (16.17%) for NFLX is below the current ROIC(24.32%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.3% | ||
| ROE | 41.07% | ||
| ROIC | 24.32% |
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 Profit Margin of 24.58%. This is amongst the best in the industry. NFLX outperforms 95.00% of its industry peers.
NFLX's Profit Margin has improved in the last couple of years.
The Operating Margin of NFLX (29.51%) is better than 97.50% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
NFLX has a Gross Margin (48.49%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of NFLX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.51% | ||
| PM (TTM) | 24.58% | ||
| GM | 48.49% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NFLX is creating value.
The number of shares outstanding for NFLX has been reduced compared to 1 year ago.
Compared to 5 years ago, NFLX has less shares outstanding
Compared to 1 year ago, NFLX has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 13.82 indicates that NFLX is not in any danger for bankruptcy at the moment.
NFLX has a Altman-Z score of 13.82. This is amongst the best in the industry. NFLX outperforms 93.75% of its industry peers.
The Debt to FCF ratio of NFLX is 1.70, which is an excellent value as it means it would take NFLX, only 1.70 years of fcf income to pay off all of its debts.
NFLX has a better Debt to FCF ratio (1.70) than 78.75% of its industry peers.
A Debt/Equity ratio of 0.58 indicates that NFLX is somewhat dependend on debt financing.
NFLX has a Debt to Equity ratio of 0.58. This is comparable to the rest of the industry: NFLX outperforms 43.75% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1.7 | ||
| Altman-Z | 13.82 |
ROIC/WACC2.85
WACC8.53%
2.3 Liquidity
NFLX has a Current Ratio of 1.34. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
NFLX has a Current ratio (1.34) which is in line with its industry peers.
NFLX has a Quick Ratio of 1.34. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
NFLX has a Quick ratio (1.34) which is in line with its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 46.69% over the past year.
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.
NFLX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.84%.
The Revenue has been growing by 14.11% on average over the past years. This is quite good.
EPS 1Y (TTM)46.69%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%47.34%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
3.2 Future
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.09% yearly.
The Revenue is expected to grow by 12.02% on average over the next years. This is quite good.
EPS Next Y34.91%
EPS Next 2Y28.88%
EPS Next 3Y26.19%
EPS Next 5Y22.09%
Revenue Next Year15.8%
Revenue Next 2Y14.33%
Revenue Next 3Y13.22%
Revenue Next 5Y12.02%
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 Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
NFLX is valuated quite expensively with a Price/Earnings ratio of 52.76.
Compared to the rest of the industry, the Price/Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 71.25% of the companies listed in the same industry.
NFLX is valuated expensively when we compare the Price/Earnings ratio to 27.69, which is the current average of the S&P500 Index.
NFLX is valuated quite expensively with a Price/Forward Earnings ratio of 37.59.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 72.50% of the companies listed in the same industry.
NFLX is valuated expensively when we compare the Price/Forward Earnings ratio to 23.18, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.76 | ||
| Fwd PE | 37.59 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 63.75% of the companies listed in the same industry.
NFLX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 61.89 | ||
| EV/EBITDA | 18.91 |
4.3 Compensation for Growth
NFLX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of NFLX may justify a higher PE ratio.
A more expensive valuation may be justified as NFLX's earnings are expected to grow with 26.19% in the coming years.
PEG (NY)1.51
PEG (5Y)1.43
EPS Next 2Y28.88%
EPS Next 3Y26.19%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:NFLX (10/21/2025, 9:43:09 AM)
1238.19
-0.37 (-0.03%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.3%
Inst Owner Change-0.69%
Ins Owners0.03%
Ins Owner Change-0.03%
Market Cap526.14B
Analysts80.71
Price Target1379.03 (11.37%)
Short Float %1.65%
Short Ratio2.31
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)6.54%
Min EPS beat(2)-0.4%
Max EPS beat(2)13.49%
EPS beat(4)2
Avg EPS beat(4)4.08%
Min EPS beat(4)-0.4%
Max EPS beat(4)13.49%
EPS beat(8)5
Avg EPS beat(8)3.72%
EPS beat(12)7
Avg EPS beat(12)0.86%
EPS beat(16)11
Avg EPS beat(16)7.34%
Revenue beat(2)0
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-1.84%
Max Revenue beat(2)-1.7%
Revenue beat(4)0
Avg Revenue beat(4)-1.4%
Min Revenue beat(4)-1.84%
Max Revenue beat(4)-0.66%
Revenue beat(8)0
Avg Revenue beat(8)-1.35%
Revenue beat(12)0
Avg Revenue beat(12)-1.57%
Revenue beat(16)0
Avg Revenue beat(16)-1.77%
PT rev (1m)0.35%
PT rev (3m)7.66%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)4.39%
EPS NY rev (1m)0.07%
EPS NY rev (3m)2.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.25%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.76 | ||
| Fwd PE | 37.59 | ||
| P/S | 12.62 | ||
| P/FCF | 61.89 | ||
| P/OCF | 58.01 | ||
| P/B | 21.09 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.91 |
EPS(TTM)23.47
EY1.9%
EPS(NY)32.94
Fwd EY2.66%
FCF(TTM)20.01
FCFY1.62%
OCF(TTM)21.35
OCFY1.72%
SpS98.12
BVpS58.72
TBVpS-16.8
PEG (NY)1.51
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.3% | ||
| ROE | 41.07% | ||
| ROCE | 27.86% | ||
| ROIC | 24.32% | ||
| ROICexc | 30.03% | ||
| ROICexgc | 292.03% | ||
| OM | 29.51% | ||
| PM (TTM) | 24.58% | ||
| GM | 48.49% | ||
| FCFM | 20.39% |
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-Score7
Asset Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1.7 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 3.6% | ||
| Cap/Sales | 1.37% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 32.23% | ||
| Profit Quality | 82.95% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 13.82 |
F-Score7
WACC8.53%
ROIC/WACC2.85
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)46.69%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%47.34%
EPS Next Y34.91%
EPS Next 2Y28.88%
EPS Next 3Y26.19%
EPS Next 5Y22.09%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
Revenue Next Year15.8%
Revenue Next 2Y14.33%
Revenue Next 3Y13.22%
Revenue Next 5Y12.02%
EBIT growth 1Y42.28%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year37.9%
EBIT Next 3Y25.13%
EBIT Next 5Y21.46%
FCF growth 1Y99.54%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y96.35%
OCF growth 3Y165.66%
OCF growth 5YN/A