Investors should take note of NASDAQ:NFLX, a growth stock that remains attractively priced.

Last update: Jan 3, 2025

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 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:

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.
The Earnings Per Share has been growing by 34.98% on average over the past years. This is a very strong growth
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 14.80% in the last year.
The Revenue has been growing by 16.38% on average over the past years. This is quite good.
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.33% yearly.
The Revenue is expected to grow by 11.29% on average over the next years. This is quite good.

What does the Valuation looks like for NASDAQ:NFLX

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:NFLX scores a 5 out of 10:

Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 66.67% of the companies in the same industry.
NFLX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 71.21% of the companies in the same industry.
65.15% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
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 34.06% in the coming years. This may justify a more expensive valuation.

What does the Health looks like for NASDAQ:NFLX

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:NFLX scores a 8 out of 10:

NFLX has an Altman-Z score of 9.84. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
NFLX has a Altman-Z score of 9.84. This is amongst the best in the industry. NFLX outperforms 96.97% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 2.24, NFLX is in the better half of the industry, outperforming 78.79% of the companies in the same industry.
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.
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.

Profitability Examination for 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:

The Return On Assets of NFLX (14.88%) is better than 95.45% of its industry peers.
Looking at the Return On Equity, with a value of 34.25%, NFLX belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
NFLX has a better Return On Invested Capital (19.19%) than 96.97% 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.
With an excellent Profit Margin value of 20.70%, NFLX belongs to the best of the industry, outperforming 92.42% of the companies in the same industry.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX has a Operating Margin of 25.65%. This is amongst the best in the industry. NFLX outperforms 93.94% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
In the last couple of years the Gross Margin of NFLX has grown nicely.

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

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

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.