NASDAQ:NFLX, a growth stock which is not overvalued.

Our stock screener has singled out NETFLIX INC (NASDAQ:NFLX) as an attractive growth opportunity. NASDAQ:NFLX is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

What does the Growth looks like for NASDAQ:NFLX

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:NFLX scores a 7 out of 10:

• NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 76.35%, 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.
• NFLX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.38% yearly.
• The Earnings Per Share is expected to grow by 24.29% 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 10.95% yearly.

Valuation Assessment of NASDAQ:NFLX

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:NFLX has earned a 5 for valuation:

• Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
• Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than 70.00% of the companies in the same industry.
• Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than 70.00% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 70.00% of the companies listed in the same industry.
• 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.
• A more expensive valuation may be justified as NFLX's earnings are expected to grow with 32.56% in the coming years.

Deciphering NASDAQ:NFLX's Health Rating

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:NFLX was assigned a score of 7 for health:

• An Altman-Z score of 9.23 indicates that NFLX is not in any danger for bankruptcy at the moment.
• NFLX has a better Altman-Z score (9.23) than 98.57% of its industry peers.
• The Debt to FCF ratio of NFLX is 2.05, which is a good value as it means it would take NFLX, 2.05 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 2.05, NFLX belongs to the best of the industry, outperforming 85.71% 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.
• NFLX does not score too well on the current and quick ratio evaluation. However, as it has 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

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:NFLX was assigned a score of 8 for profitability:

• With an excellent Return On Assets value of 14.45%, NFLX belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
• The Return On Equity of NFLX (32.08%) is better than 94.29% of its industry peers.
• NFLX has a Return On Invested Capital of 18.37%. This is amongst the best in the industry. NFLX outperforms 95.71% of its industry peers.
• The 3 year average ROIC (13.36%) for NFLX is below the current ROIC(18.37%), indicating increased profibility in the last year.
• NFLX has a better Profit Margin (19.54%) than 94.29% of its industry peers.
• NFLX's Profit Margin has improved in the last couple of years.
• NFLX's Operating Margin of 23.82% is amongst the best of the industry. NFLX outperforms 94.29% of its industry peers.
• NFLX's Operating Margin has improved in the last couple of years.
• NFLX's Gross Margin has improved in the last couple of years.

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

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.