NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - US64110L1061 - Common Stock
1220 USD
-6.09 (-0.5%)
Taking everything into account, NFLX scores 7 out of 10 in our fundamental rating. NFLX was compared to 75 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 not overvalued while it is showing excellent growth. This is an interesting combination. This makes NFLX very considerable 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.
Each year in the past 5 years NFLX has been profitable.
In the past 5 years NFLX always reported a positive cash flow from operatings.
1.2 Ratios
NFLX's Return On Assets of 19.30% is amongst the best of the industry. NFLX outperforms 97.33% of its industry peers.
NFLX's Return On Equity of 41.07% is amongst the best of the industry. NFLX outperforms 94.67% of its industry peers.
NFLX's Return On Invested Capital of 24.32% is amongst the best of the industry. NFLX outperforms 97.33% of its industry peers.
NFLX had an Average Return On Invested Capital over the past 3 years of 16.17%. This is significantly below the industry average of 23.16%.
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
Looking at the Profit Margin, with a value of 24.58%, NFLX belongs to the top of the industry, outperforming 94.67% of the companies in the same industry.
NFLX's Profit Margin has improved in the last couple of years.
NFLX has a Operating Margin of 29.51%. This is amongst the best in the industry. NFLX outperforms 97.33% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
NFLX's Gross Margin of 48.49% is in line compared to the rest of the industry. NFLX outperforms 57.33% of its industry peers.
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.
NFLX has less shares outstanding than it did 1 year ago.
NFLX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NFLX has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 13.71 indicates that NFLX is not in any danger for bankruptcy at the moment.
NFLX's Altman-Z score of 13.71 is amongst the best of the industry. NFLX outperforms 96.00% 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's Debt to FCF ratio of 1.70 is amongst the best of the industry. NFLX outperforms 81.33% 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 (0.58) which is in line with 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1.7 | ||
| Altman-Z | 13.71 |
ROIC/WACC2.77
WACC8.78%
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 better Current ratio (1.34) than 62.67% of its industry peers.
A Quick Ratio of 1.34 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX has a Quick ratio of 1.34. This is in the better half of the industry: NFLX outperforms 65.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.69%, which is quite impressive.
The Earnings Per Share has been growing by 36.86% on average over the past years. This is a very strong growth
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 14.84% in the last year.
NFLX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.11% yearly.
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
Based on estimates for the next years, NFLX will show a very strong growth in Earnings Per Share. The EPS will grow by 21.86% on average per year.
NFLX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.01% yearly.
EPS Next Y34.81%
EPS Next 2Y28.83%
EPS Next 3Y26.05%
EPS Next 5Y21.86%
Revenue Next Year15.86%
Revenue Next 2Y14.37%
Revenue Next 3Y13.24%
Revenue Next 5Y12.01%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 51.98 indicates a quite expensive valuation of NFLX.
NFLX's Price/Earnings ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 72.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of NFLX to the average of the S&P500 Index (27.08), we can say NFLX is valued expensively.
NFLX is valuated quite expensively with a Price/Forward Earnings ratio of 37.07.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 68.00% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of NFLX to the average of the S&P500 Index (22.67), we can say NFLX is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.98 | ||
| Fwd PE | 37.07 |
4.2 Price Multiples
NFLX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 65.33% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NFLX is valued a bit cheaper than 65.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.98 | ||
| EV/EBITDA | 18.72 |
4.3 Compensation for Growth
The 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 26.05% in the coming years.
PEG (NY)1.49
PEG (5Y)1.41
EPS Next 2Y28.83%
EPS Next 3Y26.05%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:NFLX (8/27/2025, 3:04:15 PM)
1220
-6.09 (-0.5%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.86%
Inst Owner Change-4.51%
Ins Owners0.03%
Ins Owner Change-0.03%
Market Cap518.41B
Analysts80
Price Target1366.7 (12.02%)
Short Float %1.51%
Short Ratio1.92
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)6.7%
PT rev (3m)19.39%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-0.45%
EPS NY rev (1m)2.46%
EPS NY rev (3m)2.82%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)2.8%
Revenue NY rev (1m)1.25%
Revenue NY rev (3m)1.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.98 | ||
| Fwd PE | 37.07 | ||
| P/S | 12.43 | ||
| P/FCF | 60.98 | ||
| P/OCF | 57.15 | ||
| P/B | 20.78 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.72 |
EPS(TTM)23.47
EY1.92%
EPS(NY)32.91
Fwd EY2.7%
FCF(TTM)20.01
FCFY1.64%
OCF(TTM)21.35
OCFY1.75%
SpS98.12
BVpS58.72
TBVpS-16.8
PEG (NY)1.49
PEG (5Y)1.41
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 | 13.71 |
F-Score7
WACC8.78%
ROIC/WACC2.77
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 Y34.81%
EPS Next 2Y28.83%
EPS Next 3Y26.05%
EPS Next 5Y21.86%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
Revenue Next Year15.86%
Revenue Next 2Y14.37%
Revenue Next 3Y13.24%
Revenue Next 5Y12.01%
EBIT growth 1Y42.28%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year38.09%
EBIT Next 3Y25.42%
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