NETFLIX INC (NFLX)
US64110L1061 - Common Stock
NFLX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 77 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 showing excellent growth while it is valued at reasonable prices. 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.
In the past 5 years NFLX has always been profitable.
NFLX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.10%, NFLX belongs to the best of the industry, outperforming 93.51% of the companies in the same industry.
The Return On Equity of NFLX (26.27%) is better than 93.51% of its industry peers.
The Return On Invested Capital of NFLX (14.43%) is better than 93.51% 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 37.63%.
The 3 year average ROIC (13.36%) for NFLX is below the current ROIC(14.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.1% | ||
| ROE | 26.27% | ||
| ROIC | 14.43% |
ROA(3y)10.61%
ROA(5y)8.87%
ROE(3y)26.72%
ROE(5y)25.95%
ROIC(3y)13.36%
ROIC(5y)12.6%
1.3 Margins
Looking at the Profit Margin, with a value of 16.04%, NFLX belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX has a Operating Margin of 20.62%. This is amongst the best in the industry. NFLX outperforms 92.21% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
With a Gross Margin value of 41.54%, NFLX perfoms like the industry average, outperforming 53.25% of the companies in the same industry.
In the last couple of years the Gross Margin of NFLX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.62% | ||
| PM (TTM) | 16.04% | ||
| GM | 41.54% |
OM growth 3Y-3.22%
OM growth 5Y15.2%
PM growth 3Y13.23%
PM growth 5Y15.9%
GM growth 3Y-1.37%
GM growth 5Y2.4%
2. Health
2.1 Basic Checks
NFLX has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for NFLX has been reduced compared to 1 year ago.
Compared to 5 years ago, NFLX has less shares outstanding
NFLX has a worse debt/assets ratio than last year.
2.2 Solvency
NFLX has an Altman-Z score of 6.96. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 6.96, NFLX belongs to the best of the industry, outperforming 94.81% of the companies in the same industry.
NFLX has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as NFLX would need 2.10 years to pay back of all of its debts.
NFLX has a Debt to FCF ratio of 2.10. This is amongst the best in the industry. NFLX outperforms 88.31% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that NFLX is somewhat dependend on debt financing.
NFLX's Debt to Equity ratio of 0.69 is in line compared to the rest of the industry. NFLX outperforms 44.16% of its industry peers.
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 | 0.69 | ||
| Debt/FCF | 2.1 | ||
| Altman-Z | 6.96 |
ROIC/WACC1.61
WACC8.99%
2.3 Liquidity
NFLX has a Current Ratio of 1.12. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
NFLX's Current ratio of 1.12 is in line compared to the rest of the industry. NFLX outperforms 55.84% of its industry peers.
NFLX has a Quick Ratio of 1.12. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
NFLX's Quick ratio of 1.12 is in line compared to the rest of the industry. NFLX outperforms 55.84% of its industry peers.
The current and quick ratio evaluation for NFLX is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.70% over the past year.
NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.98% yearly.
Looking at the last year, NFLX shows a small growth in Revenue. The Revenue has grown by 6.67% in the last year.
Measured over the past years, NFLX shows a quite strong growth in Revenue. The Revenue has been growing by 16.38% on average per year.
EPS 1Y (TTM)20.7%
EPS 3Y25.4%
EPS 5Y34.98%
EPS growth Q2Q1658.33%
Revenue 1Y (TTM)6.67%
Revenue growth 3Y10.5%
Revenue growth 5Y16.38%
Revenue growth Q2Q12.49%
3.2 Future
The Earnings Per Share is expected to grow by 22.73% on average over the next years. This is a very strong growth
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 10.31% on average per year.
EPS Next Y45.88%
EPS Next 2Y34.25%
EPS Next 3Y29.08%
EPS Next 5Y22.73%
Revenue Next Year14.88%
Revenue Next 2Y13.56%
Revenue Next 3Y12.22%
Revenue Next 5Y10.31%
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.
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 47.03 indicates a quite expensive valuation of NFLX.
Compared to the rest of the industry, the Price/Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 72.73% 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 25.20.
Based on the Price/Forward Earnings ratio of 32.24, the valuation of NFLX can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 76.62% of the companies listed in the same industry.
NFLX is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.03 | ||
| Fwd PE | 32.24 |
4.2 Price Multiples
NFLX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 76.62% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NFLX is valued a bit cheaper than the industry average as 74.03% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.29 | ||
| EV/EBITDA | 11.51 |
4.3 Compensation for Growth
NFLX's 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.
NFLX's earnings are expected to grow with 29.08% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.03
PEG (5Y)1.34
EPS Next 2Y34.25%
EPS Next 3Y29.08%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NETFLIX INC
NASDAQ:NFLX (4/25/2024, 7:07:32 PM)
After market: 563.88 -0.92 (-0.16%)564.8
+9.68 (+1.74%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap244.42B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.03 | ||
| Fwd PE | 32.24 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.03
PEG (5Y)1.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.1% | ||
| ROE | 26.27% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 20.62% | ||
| PM (TTM) | 16.04% | ||
| GM | 41.54% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)20.7%
EPS 3Y25.4%
EPS 5Y
EPS growth Q2Q
EPS Next Y45.88%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.67%
Revenue growth 3Y10.5%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
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OCF growth 5Y