NASDAQ:NFLX qualifies as a high growth stock and is consolidating.

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if NETFLIX INC (NASDAQ:NFLX) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted NETFLIX INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Assessing Growth Metrics for NASDAQ:NFLX

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:NFLX, the assigned 8 reflects its growth potential:

• NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.95%, which is quite impressive.
• NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.98% yearly.
• The Revenue has grown by 9.47% in the past year. This is quite good.
• The Revenue has been growing by 16.38% on average over the past years. This is quite good.
• 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.

A Closer Look at Health for NASDAQ:NFLX

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:NFLX has earned a 8 out of 10:

• An Altman-Z score of 8.10 indicates that NFLX is not in any danger for bankruptcy at the moment.
• NFLX's Altman-Z score of 8.10 is amongst the best of the industry. NFLX outperforms 98.68% of its industry peers.
• The Debt to FCF ratio of NFLX is 2.02, which is a good value as it means it would take NFLX, 2.02 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 2.02, NFLX belongs to the best of the industry, outperforming 86.84% of the companies in the same 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.
• 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.

Understanding NASDAQ:NFLX's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:NFLX has achieved a 8:

• NFLX has a better Return On Assets (13.18%) than 94.74% of its industry peers.
• NFLX has a better Return On Equity (30.12%) than 93.42% of its industry peers.
• NFLX has a Return On Invested Capital of 16.47%. This is amongst the best in the industry. NFLX outperforms 96.05% of its industry peers.
• The 3 year average ROIC (13.36%) for NFLX is below the current ROIC(16.47%), indicating increased profibility in the last year.
• NFLX has a better Profit Margin (18.42%) than 94.74% 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 22.54%, NFLX belongs to the top of the industry, outperforming 94.74% of the companies in the same industry.
• In the last couple of years the Operating Margin of NFLX has grown nicely.
• NFLX's Gross Margin has improved in the last couple of years.

How do we evaluate the setup for NASDAQ:NFLX?

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NASDAQ:NFLX exhibits a 8 setup rating, indicating its consolidation status in recent days and weeks.

Besides having an excellent technical rating, NFLX also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 650.28. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 631.61, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of NFLX contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of NFLX

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.