NETFLIX INC (NFLX)
US64110L1061 - Common Stock
We assign a fundamental rating of 7 out of 10 to NFLX. NFLX was compared to 76 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 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
In the past year NFLX was profitable.
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
NFLX has a better Return On Assets (13.18%) than 94.74% of its industry peers.
Looking at the Return On Equity, with a value of 30.12%, NFLX belongs to the top of the industry, outperforming 93.42% of the companies in the same industry.
With an excellent Return On Invested Capital value of 16.47%, NFLX belongs to the best of the industry, outperforming 96.05% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NFLX is in line with the industry average of 13.61%.
The last Return On Invested Capital (16.47%) for NFLX is above the 3 year average (13.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.18% | ||
| ROE | 30.12% | ||
| ROIC | 16.47% |
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
The Profit Margin of NFLX (18.42%) is better than 94.74% of its industry peers.
NFLX's Profit Margin has improved in the last couple of years.
The Operating Margin of NFLX (22.54%) is better than 94.74% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
NFLX has a Gross Margin (43.06%) which is in line with its industry peers.
In the last couple of years the Gross Margin of NFLX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.54% | ||
| PM (TTM) | 18.42% | ||
| GM | 43.06% |
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 well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, NFLX has less shares outstanding
The number of shares outstanding for NFLX has been reduced compared to 5 years ago.
NFLX has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.82 indicates that NFLX is not in any danger for bankruptcy at the moment.
NFLX's Altman-Z score of 7.82 is amongst the best of the industry. NFLX outperforms 98.68% of its industry peers.
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.
NFLX has a Debt to FCF ratio of 2.02. This is amongst the best in the industry. NFLX outperforms 86.84% 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.
NFLX has a Debt to Equity ratio of 0.62. This is comparable to the rest of the industry: NFLX outperforms 46.05% of its industry peers.
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 | 0.62 | ||
| Debt/FCF | 2.02 | ||
| Altman-Z | 7.82 |
ROIC/WACC1.88
WACC8.76%
2.3 Liquidity
NFLX has a Current Ratio of 1.07. 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 (1.07) is comparable to the rest of the industry.
A Quick Ratio of 1.07 indicates that NFLX should not have too much problems paying its short term obligations.
The Quick ratio of NFLX (1.07) is comparable to the rest of the industry.
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 | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 54.95% 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 34.98% on average per year.
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 9.47% in the last year.
NFLX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.38% yearly.
EPS 1Y (TTM)54.95%
EPS 3Y25.4%
EPS 5Y34.98%
EPS growth Q2Q83.33%
Revenue 1Y (TTM)9.47%
Revenue growth 3Y10.5%
Revenue growth 5Y16.38%
Revenue growth Q2Q14.81%
3.2 Future
The Earnings Per Share is expected to grow by 24.27% on average over the next years. This is a very strong growth
NFLX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.94% yearly.
EPS Next Y45.88%
EPS Next 2Y34.25%
EPS Next 3Y29.08%
EPS Next 5Y24.27%
Revenue Next Year14.88%
Revenue Next 2Y13.56%
Revenue Next 3Y12.22%
Revenue Next 5Y10.94%
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
With a Price/Earnings ratio of 43.10, NFLX can be considered very expensive at the moment.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than the industry average as 72.37% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.60, NFLX is valued quite expensively.
With a Price/Forward Earnings ratio of 28.69, NFLX can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than 75.00% 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 20.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.1 | ||
| Fwd PE | 28.69 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
69.74% of the companies in the same industry are more expensive than NFLX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.53 | ||
| EV/EBITDA | 12.13 |
4.3 Compensation for Growth
NFLX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NFLX 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)0.94
PEG (5Y)1.23
EPS Next 2Y34.25%
EPS Next 3Y29.08%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NETFLIX INC
NASDAQ:NFLX (5/17/2024, 7:15:59 PM)
After market: 621.49 +0.39 (+0.06%)621.1
+10.58 (+1.73%)
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 Cap267.63B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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PT rev (1m)
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.1 | ||
| Fwd PE | 28.69 | ||
| 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)0.94
PEG (5Y)1.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.18% | ||
| ROE | 30.12% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 22.54% | ||
| PM (TTM) | 18.42% | ||
| GM | 43.06% | ||
| 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 Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| 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)54.95%
EPS 3Y25.4%
EPS 5Y
EPS growth Q2Q
EPS Next Y45.88%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.47%
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
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