NASDAQ:NFLX—A High-Growth Stock Gearing Up for Its Next Upward Move.

Exploring Growth Potential: NETFLIX INC (NASDAQ:NFLX) and Its Base Formation. Growth investors seek promising revenue and EPS growth, and NETFLIX INC has come under our scrutiny for potential growth investing. While it's crucial to do your own research, we've detected NETFLIX INC on our screen for growth with base formation, suggesting it merits a closer look.

ChartMill's Evaluation of Growth

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:

• The Earnings Per Share has grown by an impressive 76.35% 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.
• The Revenue has grown by 14.80% 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 25.33% 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 11.29% on average per year.

Health Examination for NASDAQ:NFLX

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 8 for health:

• An Altman-Z score of 10.06 indicates that NFLX is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 10.06, NFLX belongs to the best of the industry, outperforming 97.18% of the companies in the same industry.
• The Debt to FCF ratio of NFLX is 2.24, which is a good value as it means it would take NFLX, 2.24 years of fcf income to pay off all of its debts.
• NFLX has a Debt to FCF ratio of 2.24. This is amongst the best in the industry. NFLX outperforms 80.28% 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.
• 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.

Analyzing Profitability Metrics

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:NFLX scores a 8 out of 10:

• NFLX has a Return On Assets of 14.88%. This is amongst the best in the industry. NFLX outperforms 94.37% of its industry peers.
• NFLX has a better Return On Equity (34.25%) than 91.55% of its industry peers.
• NFLX has a Return On Invested Capital of 19.19%. This is amongst the best in the industry. NFLX outperforms 95.77% of its industry peers.
• The last Return On Invested Capital (19.19%) for NFLX is above the 3 year average (13.36%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 20.70%, NFLX belongs to the top of the industry, outperforming 92.96% of the companies in the same industry.
• NFLX's Profit Margin has improved in the last couple of years.
• The Operating Margin of NFLX (25.65%) is better than 94.37% 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.

How does the Setup look for NASDAQ:NFLX

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:NFLX currently has a 8 as setup rating:

NFLX has an excellent technical rating and 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 support zone below the current price at 909.04, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Check the latest full fundamental report of NFLX for a complete fundamental analysis.

Check the latest full technical report of NFLX for a complete technical analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.