NETFLIX INC (NFLX)
US64110L1061 - Common Stock
Overall NFLX gets a fundamental rating of 6 out of 10. We evaluated NFLX against 76 industry peers in the Entertainment industry. While NFLX belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. NFLX has a decent growth rate and is not valued too expensively.
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.
In multiple years NFLX reported negative operating cash flow during the last 5 years.
1.2 Ratios
With an excellent Return On Assets value of 8.36%, NFLX belongs to the best of the industry, outperforming 92.00% of the companies in the same industry.
With an excellent Return On Equity value of 18.60%, NFLX belongs to the best of the industry, outperforming 94.67% of the companies in the same industry.
The Return On Invested Capital of NFLX (10.78%) is better than 89.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NFLX is significantly above the industry average of 7.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.36% | ||
| ROE | 18.6% | ||
| ROIC | 10.78% |
ROA(3y)9.25%
ROA(5y)7.58%
ROE(3y)26.28%
ROE(5y)25.32%
ROIC(3y)13.22%
ROIC(5y)10.81%
1.3 Margins
NFLX has a Profit Margin of 13.22%. This is amongst the best in the industry. NFLX outperforms 92.00% of its industry peers.
NFLX's Profit Margin has improved in the last couple of years.
NFLX has a better Operating Margin (17.51%) than 88.00% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
NFLX's Gross Margin of 38.77% is in line compared to the rest of the industry. NFLX outperforms 48.00% of its industry peers.
NFLX's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.51% | ||
| PM | 13.22% | ||
| GM | 38.77% |
OM growth 3Y11.31%
OM growth 5Y19.95%
PM growth 3Y15.33%
PM growth 5Y24.34%
GM growth 3Y0.94%
GM growth 5Y2.68%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so NFLX is still creating some value.
The number of shares outstanding for NFLX has been increased compared to 1 year ago.
NFLX has more 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
NFLX has an Altman-Z score of 5.20. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
NFLX has a Altman-Z score of 5.20. This is amongst the best in the industry. NFLX outperforms 89.33% of its industry peers.
NFLX has a debt to FCF ratio of 3.40. This is a good value and a sign of high solvency as NFLX would need 3.40 years to pay back of all of its debts.
NFLX's Debt to FCF ratio of 3.40 is amongst the best of the industry. NFLX outperforms 85.33% of its industry peers.
NFLX has a Debt/Equity ratio of 0.62. This is a neutral value indicating NFLX is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.62, NFLX perfoms like the industry average, outperforming 45.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.4 | ||
| Altman-Z | 5.2 |
ROIC/WACC48.15
WACC9.04%
2.3 Liquidity
A Current Ratio of 1.33 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX has a better Current ratio (1.33) than 61.33% of its industry peers.
NFLX has a Quick Ratio of 1.33. 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 Quick ratio (1.33) than 61.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The earnings per share for NFLX have decreased strongly by -16.53% in the last year.
NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 51.42% yearly.
The Revenue has been growing slightly by 3.53% in the past year.
The Revenue has been growing by 22.01% on average over the past years. This is a very strong growth!
EPS 1Y-16.53%
EPS 3Y34.06%
EPS 5Y51.42%
EPS growth Q2Q2.81%
Revenue growth 1Y3.53%
Revenue growth 3Y16.19%
Revenue growth 5Y22.01%
Revenue growth Q2Q2.72%
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 20.78% on average per year.
The Revenue is expected to grow by 9.45% on average over the next years. This is quite good.
EPS Next Y21.89%
EPS Next 2Y25.74%
EPS Next 3Y25.66%
EPS Next 5Y20.78%
Revenue Next Year6.71%
Revenue Next 2Y10%
Revenue Next 3Y10.35%
Revenue Next 5Y9.45%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 40.21, NFLX can be considered very expensive at the moment.
74.67% of the companies in the same industry are more expensive than NFLX, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.59. NFLX is valued rather expensively when compared to this.
NFLX is valuated rather expensively with a Price/Forward Earnings ratio of 24.00.
NFLX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 73.33% of the companies in the same industry.
NFLX's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 18.75.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.21 | ||
| Fwd PE | 24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than the industry average as 77.33% of the companies are valued more expensively.
NFLX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 77.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.28 | ||
| EV/EBITDA | 8.43 |
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.
The excellent profitability rating of NFLX may justify a higher PE ratio.
NFLX's earnings are expected to grow with 25.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.84
PEG (5Y)0.78
EPS Next 2Y25.74%
EPS Next 3Y25.66%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NETFLIX INC
NASDAQ:NFLX (9/27/2023, 7:00:01 PM)
After market: 378.34 +0.75 (+0.2%)377.59
-1.66 (-0.44%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)07-19 2023-07-19/amc
Earnings (Next)10-16 2023-10-16/amc
Inst Owners84.66%
Inst Owner Change-7.92%
Ins Owners0%
Ins Owner Change0%
Market Cap167.33B
Analysts77.6
Price Target472.7 (25.19%)
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/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)5.73%
Min EPS beat(2)-1.31%
Max EPS beat(2)12.77%
EPS beat(4)2
Avg EPS beat(4)-4.85%
Min EPS beat(4)-73.76%
Max EPS beat(4)42.88%
Revenue beat(2)2
Avg Revenue beat(2)97212.5%
Min Revenue beat(2)96665.2%
Max Revenue beat(2)97759.8%
Revenue beat(4)4
Avg Revenue beat(4)97867.7%
Min Revenue beat(4)96665.2%
Max Revenue beat(4)99056.6%
PT rev (1m)0.01%
PT rev (3m)26.72%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)10.21%
EPS NY rev (1m)0.01%
EPS NY rev (3m)7.33%
Revenue NQ rev (1m)-99.9%
Revenue NQ rev (3m)-99.9%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.21 | ||
| Fwd PE | 24 | ||
| P/S | 5.21 | ||
| P/FCF | 39.28 | ||
| P/OCF | 36.22 | ||
| P/B | 7.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.43 |
EPS(TTM)9.39
EY2.49%
EPS(NY)15.73
Fwd EY4.17%
FCF(TTM)9.61
FCFY2.55%
OCF(TTM)10.42
OCFY2.76%
SpS72.5
BVpS51.52
TBVpS-21.86
PEG (NY)1.84
PEG (5Y)0.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.36% | ||
| ROE | 18.6% | ||
| ROCE | 13.35% | ||
| ROIC | 10.78% | ||
| ROICexc | 13.54% | ||
| ROICexgc | 435.25% | ||
| OM | 17.51% | ||
| PM | 13.22% | ||
| GM | 38.77% | ||
| FCFM | 13.26% |
ROA(3y)9.25%
ROA(5y)7.58%
ROE(3y)26.28%
ROE(5y)25.32%
ROIC(3y)13.22%
ROIC(5y)10.81%
ROICexc(3y)16.51%
ROICexc(5y)13.46%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.36%
ROCE(5y)13.38%
ROICexcg growth 3YN/A
ROICexcg growth 5Y4.87%
ROICexc growth 3Y11.37%
ROICexc growth 5Y15.78%
OM growth 3Y11.31%
OM growth 5Y19.95%
PM growth 3Y15.33%
PM growth 5Y24.34%
GM growth 3Y0.94%
GM growth 5Y2.68%
F-Score6
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.4 | ||
| Debt/EBITDA | 0.69 | ||
| Cap/Depr | 2.42% | ||
| Cap/Sales | 1.12% | ||
| Profit Quality | 100.33% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 5.2 |
F-Score6
WACC9.04%
ROIC/WACC48.15
Cap/Depr(3y)3.87%
Cap/Depr(5y)3.42%
Cap/Sales(3y)1.68%
Cap/Sales(5y)1.53%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
Growth
EPS 1Y-16.53%
EPS 3Y34.06%
EPS 5Y51.42%
EPS growth Q2Q2.81%
EPS Next Y21.89%
EPS Next 2Y25.74%
EPS Next 3Y25.66%
EPS Next 5Y20.78%
Revenue growth 1Y3.53%
Revenue growth 3Y16.19%
Revenue growth 5Y22.01%
Revenue growth Q2Q2.72%
Revenue Next Year6.71%
Revenue Next 2Y10%
Revenue Next 3Y10.35%
Revenue Next 5Y9.45%
EBIT growth 1Y-5.26%
EBIT growth 3Y29.33%
EBIT growth 5Y46.35%
EBIT Next Year35.68%
EBIT Next 3Y28.27%
EBIT Next 5Y21.73%
FCF growth 1Y206.43%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y151.12%
OCF growth 3YN/A
OCF growth 5YN/A