NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD
Taking everything into account, NFLX scores 7 out of 10 in our fundamental rating. NFLX was compared to 73 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! 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.
NFLX had a positive operating cash flow in the past year.
In the past 5 years NFLX has always 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 (19.30%) than 97.26% of its industry peers.
NFLX's Return On Equity of 41.07% is amongst the best of the industry. NFLX outperforms 93.15% of its industry peers.
The Return On Invested Capital of NFLX (24.32%) is better than 97.26% 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 23.14%.
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 95.89% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX has a better Operating Margin (29.51%) than 97.26% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
With a Gross Margin value of 48.49%, NFLX perfoms like the industry average, outperforming 56.16% of the companies in the same industry.
NFLX's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NFLX 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.
The debt/assets ratio for NFLX has been reduced compared to a year ago.
2.2 Solvency
NFLX has an Altman-Z score of 13.00. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
NFLX has a better Altman-Z score (13.00) than 97.26% 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 fine compared to the rest of the industry. NFLX outperforms 79.45% 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.
NFLX has a Debt to Equity ratio (0.58) which is comparable to the rest of the 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 | 1.7 | ||
| Altman-Z | 13 |
ROIC/WACC2.79
WACC8.72%
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 of 1.34. This is in the better half of the industry: NFLX outperforms 61.64% of 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.
Looking at the Quick ratio, with a value of 1.34, NFLX is in the better half of the industry, outperforming 64.38% of the companies in the same industry.
| 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.
NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.86% yearly.
NFLX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.84%.
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
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.15% yearly.
The Revenue is expected to grow by 11.09% on average over the next years. This is quite good.
EPS Next Y31.57%
EPS Next 2Y26.62%
EPS Next 3Y24.69%
EPS Next 5Y20.15%
Revenue Next Year15.87%
Revenue Next 2Y14.37%
Revenue Next 3Y13.25%
Revenue Next 5Y11.09%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 50.21 indicates a quite expensive valuation of NFLX.
72.60% of the companies in the same industry are more expensive than NFLX, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.99, NFLX is valued quite expensively.
A Price/Forward Earnings ratio of 37.07 indicates a quite expensive valuation of NFLX.
Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than the industry average as 65.75% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.36, NFLX is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.21 | ||
| Fwd PE | 37.07 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than 67.12% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 60.27% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.91 | ||
| EV/EBITDA | 17.54 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
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 24.69% in the coming years.
PEG (NY)1.59
PEG (5Y)1.36
EPS Next 2Y26.62%
EPS Next 3Y24.69%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1178.48
+30.61 (+2.67%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.57%
Inst Owner Change-1.94%
Ins Owners0.03%
Ins Owner Change-0.57%
Market Cap500.77B
Analysts80.71
Price Target1280.9 (8.69%)
Short Float %1.46%
Short Ratio1.86
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)5.8%
PT rev (3m)12.86%
EPS NQ rev (1m)4.41%
EPS NQ rev (3m)-0.52%
EPS NY rev (1m)0.33%
EPS NY rev (3m)2.8%
Revenue NQ rev (1m)2.28%
Revenue NQ rev (3m)2.8%
Revenue NY rev (1m)1.31%
Revenue NY rev (3m)1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.21 | ||
| Fwd PE | 37.07 | ||
| P/S | 12.01 | ||
| P/FCF | 58.91 | ||
| P/OCF | 55.21 | ||
| P/B | 20.07 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.54 |
EPS(TTM)23.47
EY1.99%
EPS(NY)31.79
Fwd EY2.7%
FCF(TTM)20.01
FCFY1.7%
OCF(TTM)21.35
OCFY1.81%
SpS98.12
BVpS58.72
TBVpS-16.8
PEG (NY)1.59
PEG (5Y)1.36
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 |
F-Score7
WACC8.72%
ROIC/WACC2.79
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 Y31.57%
EPS Next 2Y26.62%
EPS Next 3Y24.69%
EPS Next 5Y20.15%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
Revenue Next Year15.87%
Revenue Next 2Y14.37%
Revenue Next 3Y13.25%
Revenue Next 5Y11.09%
EBIT growth 1Y42.28%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year33.47%
EBIT Next 3Y22.92%
EBIT Next 5Y19.31%
FCF growth 1Y99.54%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y96.35%
OCF growth 3Y165.66%
OCF growth 5YN/A