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

Our stock screener has spotted NETFLIX INC (NASDAQ:NFLX) as a growth stock which is not overvalued. NASDAQ:NFLX is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Assessing Growth Metrics for NASDAQ:NFLX

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:NFLX has earned a 8 for growth:

• The Earnings Per Share has grown by an impressive 76.35% 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 quite strong growth in Revenue. The Revenue has grown by 14.80% 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.
• Based on estimates for the next years, NFLX will show a very strong growth in Earnings Per Share. The EPS will grow by 24.29% on average per year.
• The Revenue is expected to grow by 10.95% on average over the next years. This is quite good.

Understanding NASDAQ:NFLX's Valuation Score

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:NFLX has received a 5 out of 10:

• Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 69.01% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 66.20% of the companies listed in the same industry.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 70.42% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, NFLX is valued a bit cheaper than 66.20% of the companies 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.
• NFLX has an outstanding profitability rating, which may justify a higher PE ratio.
• NFLX's earnings are expected to grow with 33.94% in the coming years. This may justify a more expensive valuation.

Deciphering NASDAQ:NFLX's Health Rating

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:NFLX has earned a 8 out of 10:

• An Altman-Z score of 9.30 indicates that NFLX is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 9.30, NFLX belongs to the best of the industry, outperforming 97.18% of the companies in the same industry.
• NFLX has a debt to FCF ratio of 2.24. This is a good value and a sign of high solvency as NFLX would need 2.24 years to pay back of all of its debts.
• NFLX has a Debt to FCF ratio of 2.24. This is amongst the best in the industry. NFLX outperforms 81.69% 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.
• 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.

Evaluating Profitability: NASDAQ:NFLX

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:

• Looking at the Return On Assets, with a value of 14.88%, NFLX belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
• NFLX's Return On Equity of 34.25% is amongst the best of the industry. NFLX outperforms 94.37% of its industry peers.
• With an excellent Return On Invested Capital value of 19.19%, NFLX belongs to the best of the industry, outperforming 95.77% of the companies in the same industry.
• The 3 year average ROIC (13.36%) for NFLX is below the current ROIC(19.19%), indicating increased profibility in the last year.
• NFLX's Profit Margin of 20.70% is amongst the best of the industry. NFLX outperforms 94.37% of its industry peers.
• In the last couple of years the Profit Margin of NFLX has grown nicely.
• NFLX has a better Operating Margin (25.65%) than 94.37% of its industry peers.
• 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.

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.

Keep in mind

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.