NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD
Taking everything into account, NFLX scores 6 out of 10 in our fundamental rating. NFLX was compared to 71 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making NFLX a very profitable company, without any liquidiy or solvency issues. NFLX is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, NFLX could be worth investigating further 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.
NFLX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 17.80%, NFLX belongs to the best of the industry, outperforming 98.59% of the companies in the same industry.
Looking at the Return On Equity, with a value of 38.58%, NFLX belongs to the top of the industry, outperforming 92.96% 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 97.18% 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 23.28%.
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
NFLX's Profit Margin of 23.07% is amongst the best of the industry. NFLX outperforms 94.37% of its industry peers.
NFLX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 27.71%, NFLX belongs to the top of the industry, outperforming 97.18% of the companies in the same industry.
In the last couple of years the Operating Margin of NFLX has grown nicely.
NFLX has a Gross Margin (46.92%) which 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
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.
Compared to 1 year ago, NFLX has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 13.31 indicates that NFLX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 13.31, NFLX belongs to the top of the industry, outperforming 98.59% of the companies in the same industry.
NFLX has a debt to FCF ratio of 2.02. This is a good value and a sign of high solvency as NFLX would need 2.02 years to pay back of 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 74.65% of the companies in the same industry.
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 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 | 13.31 |
ROIC/WACC2.56
WACC8.97%
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.
The Current ratio of NFLX (1.20) is better than 64.79% of its industry peers.
A Quick Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX has a better Quick ratio (1.20) than 64.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.84%, which is quite impressive.
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 quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.27% yearly.
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 11.16% on average per year.
EPS Next Y31.11%
EPS Next 2Y26.05%
EPS Next 3Y24.33%
EPS Next 5Y19.27%
Revenue Next Year14.35%
Revenue Next 2Y13.23%
Revenue Next 3Y12.46%
Revenue Next 5Y11.16%
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 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
The Price/Earnings ratio is 56.49, which means the current valuation is very expensive for NFLX.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 73.24% of the companies in the same industry.
NFLX is valuated expensively when we compare the Price/Earnings ratio to 26.03, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 37.94, NFLX can be considered very expensive at the moment.
66.20% of the companies in the same industry are more expensive than NFLX, based on the Price/Forward Earnings ratio.
NFLX's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.49 | ||
| Fwd PE | 37.94 |
4.2 Price Multiples
NFLX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 63.38% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as NFLX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 68.31 | ||
| EV/EBITDA | 19.1 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of NFLX may justify a higher PE ratio.
NFLX's earnings are expected to grow with 24.33% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.82
PEG (5Y)1.53
EPS Next 2Y26.05%
EPS Next 3Y24.33%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:NFLX (5/22/2025, 2:46:06 PM)
1195.24
+0.61 (+0.05%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.17%
Inst Owner Change2.06%
Ins Owners0.03%
Ins Owner Change3.12%
Market Cap508.66B
Analysts81.05
Price Target1144.76 (-4.22%)
Short Float %1.93%
Short Ratio1.51
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)3.82%
PT rev (3m)5.45%
EPS NQ rev (1m)9.16%
EPS NQ rev (3m)11.92%
EPS NY rev (1m)2.44%
EPS NY rev (3m)2.94%
Revenue NQ rev (1m)0.93%
Revenue NQ rev (3m)1.29%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.49 | ||
| Fwd PE | 37.94 | ||
| P/S | 12.66 | ||
| P/FCF | 68.31 | ||
| P/OCF | 64.08 | ||
| P/B | 21.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.1 |
EPS(TTM)21.16
EY1.77%
EPS(NY)31.51
Fwd EY2.64%
FCF(TTM)17.5
FCFY1.46%
OCF(TTM)18.65
OCFY1.56%
SpS94.4
BVpS56.46
TBVpS-18.83
PEG (NY)1.82
PEG (5Y)1.53
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 | 13.31 |
F-Score8
WACC8.97%
ROIC/WACC2.56
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 Y31.11%
EPS Next 2Y26.05%
EPS Next 3Y24.33%
EPS Next 5Y19.27%
Revenue 1Y (TTM)15%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%12.51%
Revenue Next Year14.35%
Revenue Next 2Y13.23%
Revenue Next 3Y12.46%
Revenue Next 5Y11.16%
EBIT growth 1Y41.41%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year30.43%
EBIT Next 3Y21.76%
EBIT Next 5Y18.17%
FCF growth 1Y153.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y141.85%
OCF growth 3Y165.66%
OCF growth 5YN/A