NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD
Overall NFLX gets a fundamental rating of 7 out of 10. We evaluated NFLX against 72 industry peers in the Entertainment industry. NFLX has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. NFLX is not priced too expensively while it is growing strongly. Keep and eye on this one! 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 has a better Return On Assets (17.80%) than 97.22% of its industry peers.
With an excellent Return On Equity value of 38.58%, NFLX belongs to the best of the industry, outperforming 93.06% of the companies in the same industry.
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.
The Average Return On Invested Capital over the past 3 years for NFLX is significantly below the industry average of 22.90%.
The last Return On Invested Capital (22.93%) for NFLX is above the 3 year average (16.17%), which is a sign of increasing profitability.
| 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
The Profit Margin of NFLX (23.07%) is better than 94.44% of its industry peers.
NFLX's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 27.71%, NFLX belongs to the best of the industry, outperforming 97.22% of the companies in the same industry.
In the last couple of years the Operating Margin of NFLX has grown nicely.
The Gross Margin of NFLX (46.92%) 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.
Compared to 5 years ago, NFLX has less shares outstanding
NFLX has a better debt/assets ratio than last year.
2.2 Solvency
NFLX has an Altman-Z score of 14.13. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 14.13, NFLX belongs to the best of the industry, outperforming 98.61% of the companies in the same industry.
The Debt to FCF ratio of NFLX is 2.02, which is a good value as it means it would take NFLX, 2.02 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.02, NFLX is in the better half of the industry, outperforming 76.39% of the companies in the same industry.
NFLX has a Debt/Equity ratio of 0.58. This is a neutral value indicating NFLX is somewhat dependend on debt financing.
NFLX has a Debt to Equity ratio (0.58) which is comparable to the rest of the industry.
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 | 2.02 | ||
| Altman-Z | 14.13 |
ROIC/WACC2.61
WACC8.8%
2.3 Liquidity
NFLX has a Current Ratio of 1.20. 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 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.
Looking at the Quick ratio, with a value of 1.20, NFLX is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 46.84% 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 15.00%.
Measured over the past years, NFLX shows a quite strong growth in Revenue. The Revenue has been growing by 14.11% on average per year.
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
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.15% yearly.
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 11.09% on average per year.
EPS Next Y31.14%
EPS Next 2Y26.15%
EPS Next 3Y24.35%
EPS Next 5Y20.15%
Revenue Next Year14.37%
Revenue Next 2Y13.28%
Revenue Next 3Y12.53%
Revenue Next 5Y11.09%
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
NFLX is valuated quite expensively with a Price/Earnings ratio of 61.30.
Compared to the rest of the industry, the Price/Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 70.83% of the companies listed in the same industry.
NFLX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.45.
With a Price/Forward Earnings ratio of 41.10, NFLX can be considered very expensive at the moment.
66.67% of the companies in the same industry are more expensive than NFLX, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of NFLX to the average of the S&P500 Index (21.90), we can say NFLX is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.3 | ||
| Fwd PE | 41.1 |
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 62.50% 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 | 74.14 | ||
| EV/EBITDA | 20.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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 24.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.97
PEG (5Y)1.66
EPS Next 2Y26.15%
EPS Next 3Y24.35%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1297.18
+12.32 (+0.96%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.57%
Inst Owner Change2.24%
Ins Owners0.03%
Ins Owner Change3.12%
Market Cap552.04B
Analysts80.7
Price Target1210.69 (-6.67%)
Short Float %1.68%
Short Ratio1.9
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)5.76%
PT rev (3m)10.78%
EPS NQ rev (1m)0.01%
EPS NQ rev (3m)11.91%
EPS NY rev (1m)0.02%
EPS NY rev (3m)2.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.2%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.3 | ||
| Fwd PE | 41.1 | ||
| P/S | 13.74 | ||
| P/FCF | 74.14 | ||
| P/OCF | 69.54 | ||
| P/B | 22.97 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.52 |
EPS(TTM)21.16
EY1.63%
EPS(NY)31.56
Fwd EY2.43%
FCF(TTM)17.5
FCFY1.35%
OCF(TTM)18.65
OCFY1.44%
SpS94.4
BVpS56.46
TBVpS-18.83
PEG (NY)1.97
PEG (5Y)1.66
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 | 14.13 |
F-Score8
WACC8.8%
ROIC/WACC2.61
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 Y31.14%
EPS Next 2Y26.15%
EPS Next 3Y24.35%
EPS Next 5Y20.15%
Revenue 1Y (TTM)15%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%12.51%
Revenue Next Year14.37%
Revenue Next 2Y13.28%
Revenue Next 3Y12.53%
Revenue Next 5Y11.09%
EBIT growth 1Y41.41%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year33.47%
EBIT Next 3Y22.92%
EBIT Next 5Y19.31%
FCF growth 1Y153.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y141.85%
OCF growth 3Y165.66%
OCF growth 5YN/A