NETFLIX INC (NFLX) Stock Fundamental Analysis
USA - NASDAQ:NFLX - US64110L1061 - Common Stock
1094.69 USD
-18.9 (-1.7%)
1093.52 USD
-1.17 (-0.11%)
Taking everything into account, NFLX scores 7 out of 10 in our fundamental rating. NFLX was compared to 80 industry peers in the Entertainment industry. NFLX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NFLX is growing strongly while it is still valued neutral. This is a good combination! These ratings would make NFLX suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year NFLX was profitable.
NFLX had a positive operating cash flow in the past year.
In the past 5 years NFLX has always been profitable.
NFLX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 19.30%, NFLX belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
NFLX has a Return On Equity of 41.07%. This is amongst the best in the industry. NFLX outperforms 93.75% of its industry peers.
NFLX has a better Return On Invested Capital (24.32%) than 98.75% of its industry peers.
NFLX had an Average Return On Invested Capital over the past 3 years of 16.17%. This is significantly above the industry average of 9.23%.
The 3 year average ROIC (16.17%) for NFLX is below the current ROIC(24.32%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.3% | ||
| ROE | 41.07% | ||
| ROIC | 24.32% |
ROA(3y)12.2%
ROA(5y)11.02%
ROE(3y)27.7%
ROE(5y)28.07%
ROIC(3y)16.17%
ROIC(5y)15.85%
1.3 Margins
With an excellent Profit Margin value of 24.58%, NFLX belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
In the last couple of years the Profit Margin of NFLX has grown nicely.
The Operating Margin of NFLX (29.51%) is better than 97.50% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
NFLX has a Gross Margin of 48.49%. This is comparable to the rest of the industry: NFLX outperforms 58.75% of its industry peers.
In the last couple of years the Gross Margin of NFLX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.51% | ||
| PM (TTM) | 24.58% | ||
| GM | 48.49% |
OM growth 3Y8.59%
OM growth 5Y15.63%
PM growth 3Y9.04%
PM growth 5Y19.25%
GM growth 3Y3.42%
GM growth 5Y3.77%
2. Health
2.1 Basic Checks
NFLX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NFLX has less shares outstanding than it did 1 year ago.
NFLX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NFLX has an improved debt to assets ratio.
2.2 Solvency
NFLX has an Altman-Z score of 12.69. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
NFLX's Altman-Z score of 12.69 is amongst the best of the industry. NFLX outperforms 93.75% of its industry peers.
The Debt to FCF ratio of NFLX is 1.70, which is an excellent value as it means it would take NFLX, only 1.70 years of fcf income to pay off all of its debts.
NFLX has a Debt to FCF ratio of 1.70. This is in the better half of the industry: NFLX outperforms 78.75% of its industry peers.
A Debt/Equity ratio of 0.58 indicates that NFLX is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.58, NFLX is in line with its industry, outperforming 43.75% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1.7 | ||
| Altman-Z | 12.69 |
ROIC/WACC2.86
WACC8.51%
2.3 Liquidity
NFLX has a Current Ratio of 1.34. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of NFLX (1.34) is comparable to the rest of the industry.
A Quick Ratio of 1.34 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX's Quick ratio of 1.34 is in line compared to the rest of the industry. NFLX outperforms 58.75% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.48% over the past year.
NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.86% yearly.
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 15.41% in the last year.
Measured over the past years, NFLX shows a quite strong growth in Revenue. The Revenue has been growing by 14.11% on average per year.
EPS 1Y (TTM)35.48%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%8.7%
Revenue 1Y (TTM)15.41%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%17.16%
3.2 Future
Based on estimates for the next years, NFLX will show a very strong growth in Earnings Per Share. The EPS will grow by 22.09% on average per year.
The Revenue is expected to grow by 12.02% on average over the next years. This is quite good.
EPS Next Y35.4%
EPS Next 2Y29.03%
EPS Next 3Y26.3%
EPS Next 5Y22.09%
Revenue Next Year15.78%
Revenue Next 2Y14.3%
Revenue Next 3Y13.2%
Revenue Next 5Y12.02%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 45.73, the valuation of NFLX can be described as expensive.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 71.25% of the companies in the same industry.
When comparing the Price/Earnings ratio of NFLX to the average of the S&P500 Index (26.91), we can say NFLX is valued expensively.
Based on the Price/Forward Earnings ratio of 33.16, the valuation of NFLX can be described as expensive.
72.50% of the companies in the same industry are more expensive than NFLX, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.92, NFLX is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.73 | ||
| Fwd PE | 33.16 |
4.2 Price Multiples
65.00% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, NFLX is valued a bit cheaper than 61.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.72 | ||
| EV/EBITDA | 17.02 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
NFLX has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NFLX's earnings are expected to grow with 26.30% in the coming years.
PEG (NY)1.29
PEG (5Y)1.24
EPS Next 2Y29.03%
EPS Next 3Y26.3%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1094.69
-18.9 (-1.7%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.3%
Inst Owner Change-0.69%
Ins Owners0.03%
Ins Owner Change-0.03%
Market Cap465.17B
Revenue(TTM)43.38B
Net Income(TTM)10.25B
Analysts80.71
Price Target1379.03 (25.97%)
Short Float %1.52%
Short Ratio1.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.54%
Min EPS beat(2)-0.4%
Max EPS beat(2)13.49%
EPS beat(4)2
Avg EPS beat(4)4.08%
Min EPS beat(4)-0.4%
Max EPS beat(4)13.49%
EPS beat(8)5
Avg EPS beat(8)3.72%
EPS beat(12)7
Avg EPS beat(12)0.86%
EPS beat(16)11
Avg EPS beat(16)7.34%
Revenue beat(2)0
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-1.84%
Max Revenue beat(2)-1.7%
Revenue beat(4)0
Avg Revenue beat(4)-1.4%
Min Revenue beat(4)-1.84%
Max Revenue beat(4)-0.66%
Revenue beat(8)0
Avg Revenue beat(8)-1.35%
Revenue beat(12)0
Avg Revenue beat(12)-1.57%
Revenue beat(16)0
Avg Revenue beat(16)-1.77%
PT rev (1m)0.35%
PT rev (3m)7.66%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)4.39%
EPS NY rev (1m)0.07%
EPS NY rev (3m)2.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.25%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.73 | ||
| Fwd PE | 33.16 | ||
| P/S | 11.16 | ||
| P/FCF | 54.72 | ||
| P/OCF | 51.28 | ||
| P/B | 18.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.02 |
EPS(TTM)23.94
EY2.19%
EPS(NY)33.01
Fwd EY3.02%
FCF(TTM)20.01
FCFY1.83%
OCF(TTM)21.35
OCFY1.95%
SpS98.12
BVpS58.72
TBVpS-16.8
PEG (NY)1.29
PEG (5Y)1.24
Graham Number177.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.3% | ||
| ROE | 41.07% | ||
| ROCE | 27.86% | ||
| ROIC | 24.32% | ||
| ROICexc | 30.03% | ||
| ROICexgc | 292.03% | ||
| OM | 29.51% | ||
| PM (TTM) | 24.58% | ||
| GM | 48.49% | ||
| FCFM | 20.39% |
ROA(3y)12.2%
ROA(5y)11.02%
ROE(3y)27.7%
ROE(5y)28.07%
ROIC(3y)16.17%
ROIC(5y)15.85%
ROICexc(3y)20.02%
ROICexc(5y)19.87%
ROICexgc(3y)637.19%
ROICexgc(5y)N/A
ROCE(3y)18.53%
ROCE(5y)18.16%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y14.95%
ROICexc growth 5Y21.57%
OM growth 3Y8.59%
OM growth 5Y15.63%
PM growth 3Y9.04%
PM growth 5Y19.25%
GM growth 3Y3.42%
GM growth 5Y3.77%
F-Score7
Asset Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 1.7 | ||
| Debt/EBITDA | 0.51 | ||
| Cap/Depr | 3.6% | ||
| Cap/Sales | 1.37% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 32.23% | ||
| Profit Quality | 82.95% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 12.69 |
F-Score7
WACC8.51%
ROIC/WACC2.86
Cap/Depr(3y)2.68%
Cap/Depr(5y)3.36%
Cap/Sales(3y)1.15%
Cap/Sales(5y)1.44%
Profit Quality(3y)81.18%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)35.48%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%8.7%
EPS Next Y35.4%
EPS Next 2Y29.03%
EPS Next 3Y26.3%
EPS Next 5Y22.09%
Revenue 1Y (TTM)15.41%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%17.16%
Revenue Next Year15.78%
Revenue Next 2Y14.3%
Revenue Next 3Y13.2%
Revenue Next 5Y12.02%
EBIT growth 1Y42.28%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year37.9%
EBIT Next 3Y25.13%
EBIT Next 5Y21.46%
FCF growth 1Y99.54%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y96.35%
OCF growth 3Y165.66%
OCF growth 5YN/A
NETFLIX INC / NFLX FAQ
What is the ChartMill fundamental rating of NETFLIX INC (NFLX) stock?
ChartMill assigns a fundamental rating of 7 / 10 to NFLX.
What is the valuation status for NFLX stock?
ChartMill assigns a valuation rating of 5 / 10 to NETFLIX INC (NFLX). This can be considered as Fairly Valued.
What is the profitability of NFLX stock?
NETFLIX INC (NFLX) has a profitability rating of 9 / 10.
What are the PE and PB ratios of NETFLIX INC (NFLX) stock?
The Price/Earnings (PE) ratio for NETFLIX INC (NFLX) is 45.73 and the Price/Book (PB) ratio is 18.64.