NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD
Taking everything into account, NFLX scores 6 out of 10 in our fundamental rating. NFLX was compared to 71 industry peers in the Entertainment industry. NFLX has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. NFLX is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes NFLX very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year NFLX was profitable.
In the past year NFLX had a positive cash flow from operations.
In the past 5 years NFLX has always been profitable.
Each year in the past 5 years NFLX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NFLX (16.24%) is better than 95.45% of its industry peers.
With an excellent Return On Equity value of 35.21%, NFLX belongs to the best of the industry, outperforming 89.39% of the companies in the same industry.
The Return On Invested Capital of NFLX (21.21%) is better than 96.97% of its industry peers.
NFLX had an Average Return On Invested Capital over the past 3 years of 16.17%. This is significantly below the industry average of 91.11%.
The last Return On Invested Capital (21.21%) for NFLX is above the 3 year average (16.17%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.24% | ||
| ROE | 35.21% | ||
| ROIC | 21.21% |
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's Profit Margin of 22.34% is amongst the best of the industry. NFLX outperforms 93.94% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX's Operating Margin of 26.71% is amongst the best of the industry. NFLX outperforms 96.97% of its industry peers.
In the last couple of years the Operating Margin of NFLX has grown nicely.
With a Gross Margin value of 46.06%, NFLX perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
NFLX's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.71% | ||
| PM (TTM) | 22.34% | ||
| GM | 46.06% |
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.
The number of shares outstanding for NFLX has been reduced compared to 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
An Altman-Z score of 11.34 indicates that NFLX is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 11.34, NFLX belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
The Debt to FCF ratio of NFLX is 2.25, which is a good value as it means it would take NFLX, 2.25 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.25, NFLX is in the better half of the industry, outperforming 75.76% 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 has a Debt to Equity ratio (0.56) which is in line with 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 11.34 |
ROIC/WACC2.39
WACC8.89%
2.3 Liquidity
NFLX has a Current Ratio of 1.22. 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 of 1.22. This is in the better half of the industry: NFLX outperforms 62.12% of its industry peers.
A Quick Ratio of 1.22 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX has a better Quick ratio (1.22) than 62.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 65.11% 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 36.86% on average per year.
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 15.65% in the last year.
The Revenue has been growing by 14.11% on average over the past years. This is quite good.
EPS 1Y (TTM)65.11%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%102.37%
Revenue 1Y (TTM)15.65%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%16%
3.2 Future
NFLX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.30% yearly.
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 10.85% on average per year.
EPS Next Y27.36%
EPS Next 2Y24.9%
EPS Next 3Y23%
EPS Next 5Y18.3%
Revenue Next Year13.9%
Revenue Next 2Y12.93%
Revenue Next 3Y12.24%
Revenue Next 5Y10.85%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 50.59, the valuation of NFLX can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 66.67% of the companies listed in the same industry.
NFLX is valuated expensively when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
NFLX is valuated quite expensively with a Price/Forward Earnings ratio of 39.72.
68.18% 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 rather expensive valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.59 | ||
| Fwd PE | 39.72 |
4.2 Price Multiples
65.15% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
NFLX's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 61.99 | ||
| EV/EBITDA | 16.99 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NFLX does not grow enough to justify the current Price/Earnings ratio.
NFLX has an outstanding profitability rating, which may justify a higher PE ratio.
NFLX's earnings are expected to grow with 23.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.85
PEG (5Y)1.37
EPS Next 2Y24.9%
EPS Next 3Y23%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1003.15
-21.39 (-2.09%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners85.66%
Inst Owner Change-0.79%
Ins Owners0.02%
Ins Owner Change3.16%
Market Cap429.11B
Analysts80.37
Price Target1085.6 (8.22%)
Short Float %1.49%
Short Ratio1.74
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)1.61%
Min EPS beat(2)-0.27%
Max EPS beat(2)3.48%
EPS beat(4)3
Avg EPS beat(4)4.64%
Min EPS beat(4)-0.27%
Max EPS beat(4)14.46%
EPS beat(8)5
Avg EPS beat(8)3.52%
EPS beat(12)8
Avg EPS beat(12)1.96%
EPS beat(16)11
Avg EPS beat(16)7.53%
Revenue beat(2)0
Avg Revenue beat(2)-1.04%
Min Revenue beat(2)-1.41%
Max Revenue beat(2)-0.66%
Revenue beat(4)0
Avg Revenue beat(4)-1.17%
Min Revenue beat(4)-1.64%
Max Revenue beat(4)-0.66%
Revenue beat(8)0
Avg Revenue beat(8)-1.58%
Revenue beat(12)0
Avg Revenue beat(12)-1.74%
Revenue beat(16)0
Avg Revenue beat(16)-1.75%
PT rev (1m)27.66%
PT rev (3m)40.26%
EPS NQ rev (1m)-5.75%
EPS NQ rev (3m)4.79%
EPS NY rev (1m)4.01%
EPS NY rev (3m)4.11%
Revenue NQ rev (1m)-0.92%
Revenue NQ rev (3m)0.79%
Revenue NY rev (1m)1.23%
Revenue NY rev (3m)1.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.59 | ||
| Fwd PE | 39.72 | ||
| P/S | 11 | ||
| P/FCF | 61.99 | ||
| P/OCF | 58.29 | ||
| P/B | 17.34 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.99 |
EPS(TTM)19.83
EY1.98%
EPS(NY)25.26
Fwd EY2.52%
FCF(TTM)16.18
FCFY1.61%
OCF(TTM)17.21
OCFY1.72%
SpS91.17
BVpS57.84
TBVpS-18.02
PEG (NY)1.85
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.24% | ||
| ROE | 35.21% | ||
| ROCE | 24.3% | ||
| ROIC | 21.21% | ||
| ROICexc | 27.31% | ||
| ROICexgc | 1084.06% | ||
| OM | 26.71% | ||
| PM (TTM) | 22.34% | ||
| GM | 46.06% | ||
| FCFM | 17.75% |
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%
ROICexcg growth 3YN/A
ROICexcg 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 Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 0.53 | ||
| Cap/Depr | 2.81% | ||
| Cap/Sales | 1.13% | ||
| Interest Coverage | 15.44 | ||
| Cash Conversion | 28.26% | ||
| Profit Quality | 79.46% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 11.34 |
F-Score8
WACC8.89%
ROIC/WACC2.39
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)65.11%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%102.37%
EPS Next Y27.36%
EPS Next 2Y24.9%
EPS Next 3Y23%
EPS Next 5Y18.3%
Revenue 1Y (TTM)15.65%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%16%
Revenue Next Year13.9%
Revenue Next 2Y12.93%
Revenue Next 3Y12.24%
Revenue Next 5Y10.85%
EBIT growth 1Y49.81%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year30.31%
EBIT Next 3Y22.08%
EBIT Next 5Y18.36%
FCF growth 1Y-0.06%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y1.2%
OCF growth 3Y165.66%
OCF growth 5YN/A