NETFLIX INC (NFLX) Stock Fundamental Analysis
USA - NASDAQ:NFLX - US64110L1061 - Common Stock
1103.66 USD
+6.64 (+0.61%)
1104.5 USD
+0.84 (+0.08%)
Overall NFLX gets a fundamental rating of 7 out of 10. We evaluated NFLX against 79 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making NFLX a very profitable company, without any liquidiy or solvency issues. NFLX is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, NFLX could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
NFLX had positive earnings in the past year.
In the past year NFLX had a positive cash flow from operations.
NFLX had positive earnings in each of the past 5 years.
In the past 5 years NFLX always reported a positive cash flow from operatings.
1.2 Ratios
NFLX's Return On Assets of 18.99% is amongst the best of the industry. NFLX outperforms 94.94% of its industry peers.
Looking at the Return On Equity, with a value of 40.19%, NFLX belongs to the top of the industry, outperforming 93.67% of the companies in the same industry.
NFLX has a better Return On Invested Capital (24.41%) than 98.73% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NFLX is significantly above the industry average of 9.19%.
The 3 year average ROIC (16.17%) for NFLX is below the current ROIC(24.41%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.99% | ||
| ROE | 40.19% | ||
| ROIC | 24.41% |
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
NFLX has a better Profit Margin (24.05%) than 94.94% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
Looking at the Operating Margin, with a value of 29.14%, NFLX belongs to the top of the industry, outperforming 97.47% of the companies in the same industry.
In the last couple of years the Operating Margin of NFLX has grown nicely.
NFLX has a Gross Margin (48.09%) which is in line with its industry peers.
In the last couple of years the Gross Margin of NFLX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.14% | ||
| PM (TTM) | 24.05% | ||
| GM | 48.09% |
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.
Compared to 1 year ago, NFLX has less shares outstanding
Compared to 5 years ago, NFLX has less shares outstanding
Compared to 1 year ago, NFLX has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 12.29 indicates that NFLX is not in any danger for bankruptcy at the moment.
NFLX has a better Altman-Z score (12.29) than 93.67% of its industry peers.
The Debt to FCF ratio of NFLX is 1.61, which is an excellent value as it means it would take NFLX, only 1.61 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.61, NFLX is in the better half of the industry, outperforming 78.48% of the companies in the same industry.
NFLX has a Debt/Equity ratio of 0.56. This is a neutral value indicating NFLX is somewhat dependend on debt financing.
NFLX's Debt to Equity ratio of 0.56 is in line compared to the rest of the industry. NFLX outperforms 43.04% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 1.61 | ||
| Altman-Z | 12.29 |
ROIC/WACC2.84
WACC8.6%
2.3 Liquidity
NFLX has a Current Ratio of 1.33. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
NFLX has a Current ratio (1.33) which is in line with its industry peers.
NFLX has a Quick Ratio of 1.33. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
NFLX's Quick ratio of 1.33 is in line compared to the rest of the industry. NFLX outperforms 58.23% 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 | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.48% over the past year.
The Earnings Per Share has been growing by 36.86% on average over the past years. This is a very strong growth
The Revenue has grown by 15.41% in the past year. This is quite good.
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
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.09% yearly.
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 12.02% on average per year.
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
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 46.10, NFLX can be considered very expensive at the moment.
73.42% of the companies in the same industry are more expensive than NFLX, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of NFLX to the average of the S&P500 Index (25.83), we can say NFLX is valued expensively.
A Price/Forward Earnings ratio of 33.43 indicates a quite expensive valuation of NFLX.
72.15% of the companies in the same industry are more expensive than NFLX, based on the Price/Forward Earnings ratio.
NFLX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 32.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.1 | ||
| Fwd PE | 33.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 63.29% of the companies listed in the same industry.
62.03% of the companies in the same industry are more expensive than NFLX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.3 | ||
| EV/EBITDA | 16.37 |
4.3 Compensation for Growth
NFLX's 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.
NFLX's earnings are expected to grow with 26.30% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.3
PEG (5Y)1.25
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 |
1103.66
+6.64 (+0.61%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.3%
Inst Owner Change-1.54%
Ins Owners0.03%
Ins Owner Change0%
Market Cap468.98B
Revenue(TTM)43.38B
Net Income(TTM)10.43B
Analysts80.71
Price Target1379.47 (24.99%)
Short Float %1.43%
Short Ratio1.79
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)0
Avg EPS beat(2)-8.9%
Min EPS beat(2)-17.39%
Max EPS beat(2)-0.4%
EPS beat(4)1
Avg EPS beat(4)-1.14%
Min EPS beat(4)-17.39%
Max EPS beat(4)13.49%
EPS beat(8)4
Avg EPS beat(8)0.94%
EPS beat(12)6
Avg EPS beat(12)-4.16%
EPS beat(16)10
Avg EPS beat(16)4.87%
Revenue beat(2)0
Avg Revenue beat(2)-1.92%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)-1.84%
Revenue beat(4)0
Avg Revenue beat(4)-1.55%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)-0.66%
Revenue beat(8)0
Avg Revenue beat(8)-1.36%
Revenue beat(12)0
Avg Revenue beat(12)-1.67%
Revenue beat(16)0
Avg Revenue beat(16)-1.77%
PT rev (1m)0.38%
PT rev (3m)7.7%
EPS NQ rev (1m)0.77%
EPS NQ rev (3m)0.92%
EPS NY rev (1m)0.36%
EPS NY rev (3m)2.91%
Revenue NQ rev (1m)0.5%
Revenue NQ rev (3m)0.52%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.1 | ||
| Fwd PE | 33.43 | ||
| P/S | 10.81 | ||
| P/FCF | 52.3 | ||
| P/OCF | 48.98 | ||
| P/B | 18.07 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.37 |
EPS(TTM)23.94
EY2.17%
EPS(NY)33.01
Fwd EY2.99%
FCF(TTM)21.1
FCFY1.91%
OCF(TTM)22.53
OCFY2.04%
SpS102.08
BVpS61.08
TBVpS-15.73
PEG (NY)1.3
PEG (5Y)1.25
Graham Number181.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.99% | ||
| ROE | 40.19% | ||
| ROCE | 27.97% | ||
| ROIC | 24.41% | ||
| ROICexc | 30.76% | ||
| ROICexgc | 340.72% | ||
| OM | 29.14% | ||
| PM (TTM) | 24.05% | ||
| GM | 48.09% | ||
| FCFM | 20.67% |
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-Score8
Asset Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 1.61 | ||
| Debt/EBITDA | 0.5 | ||
| Cap/Depr | 3.76% | ||
| Cap/Sales | 1.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 33.26% | ||
| Profit Quality | 85.96% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 12.29 |
F-Score8
WACC8.6%
ROIC/WACC2.84
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 1Y31.14%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year37.9%
EBIT Next 3Y25.13%
EBIT Next 5Y21.46%
FCF growth 1Y57.96%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y58.12%
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 46.1 and the Price/Book (PB) ratio is 18.07.