NETFLIX INC (NFLX) Stock Fundamental Analysis
USA - NASDAQ:NFLX - US64110L1061 - Common Stock
1228.5 USD
+27.99 (+2.33%)
1230 USD
+1.5 (+0.12%)
Overall NFLX gets a fundamental rating of 7 out of 10. We evaluated NFLX against 80 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! These ratings could make NFLX a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
NFLX had positive earnings in the past year.
NFLX had a positive operating cash flow in the past year.
Each year in the past 5 years NFLX has been profitable.
Each year in the past 5 years NFLX had a positive operating cash flow.
1.2 Ratios
NFLX's Return On Assets of 19.30% is amongst the best of the industry. NFLX outperforms 95.00% of its industry peers.
Looking at the Return On Equity, with a value of 41.07%, NFLX belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 24.32%, NFLX belongs to the best of the industry, outperforming 98.75% of the companies in the same industry.
NFLX had an Average Return On Invested Capital over the past 3 years of 16.17%. This is significantly above the industry average of 9.25%.
The last Return On Invested Capital (24.32%) for NFLX is above the 3 year average (16.17%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 24.58%, NFLX belongs to the top 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.
NFLX has a better Operating Margin (29.51%) than 97.50% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
NFLX has a Gross Margin (48.49%) which is comparable to the rest of the industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NFLX is creating value.
NFLX has less shares outstanding than it did 1 year ago.
The number of shares outstanding for NFLX has been reduced compared to 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 13.73. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
NFLX has a Altman-Z score of 13.73. This is amongst the best in the industry. NFLX outperforms 96.25% of its industry peers.
NFLX has a debt to FCF ratio of 1.70. This is a very positive value and a sign of high solvency as it would only need 1.70 years to pay back of all of its debts.
NFLX's Debt to FCF ratio of 1.70 is fine compared to the rest of the industry. NFLX outperforms 80.00% of its industry peers.
A Debt/Equity ratio of 0.58 indicates that NFLX is somewhat dependend on debt financing.
NFLX has a Debt to Equity ratio (0.58) which is in line with 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 | 0.58 | ||
| Debt/FCF | 1.7 | ||
| Altman-Z | 13.73 |
ROIC/WACC2.84
WACC8.55%
2.3 Liquidity
A Current Ratio of 1.34 indicates that NFLX should not have too much problems paying 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 60.00% of its industry peers.
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.
| 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 46.69% 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.
The Revenue has grown by 14.84% in the past year. This is quite good.
NFLX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.11% yearly.
EPS 1Y (TTM)46.69%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%47.34%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
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 21.86% on average per year.
NFLX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.01% yearly.
EPS Next Y34.81%
EPS Next 2Y28.83%
EPS Next 3Y26.05%
EPS Next 5Y21.86%
Revenue Next Year15.8%
Revenue Next 2Y14.33%
Revenue Next 3Y13.21%
Revenue Next 5Y12.01%
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.
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
The Price/Earnings ratio is 52.34, which means the current valuation is very expensive for NFLX.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 73.75% of the companies in the same industry.
NFLX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.20.
With a Price/Forward Earnings ratio of 37.33, NFLX can be considered very expensive at the moment.
NFLX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NFLX is cheaper than 70.00% of the companies in the same industry.
NFLX is valuated expensively when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.34 | ||
| Fwd PE | 37.33 |
4.2 Price Multiples
66.25% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as NFLX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 61.41 | ||
| EV/EBITDA | 18.76 |
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.
A more expensive valuation may be justified as NFLX's earnings are expected to grow with 26.05% in the coming years.
PEG (NY)1.5
PEG (5Y)1.42
EPS Next 2Y28.83%
EPS Next 3Y26.05%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1228.5
+27.99 (+2.33%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.86%
Inst Owner Change-4.48%
Ins Owners0.03%
Ins Owner Change-0.03%
Market Cap522.03B
Analysts80.36
Price Target1374.29 (11.87%)
Short Float %1.56%
Short Ratio2.02
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)0.99%
PT rev (3m)16.53%
EPS NQ rev (1m)0.42%
EPS NQ rev (3m)5%
EPS NY rev (1m)2.46%
EPS NY rev (3m)2.82%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)2.23%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)1.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.34 | ||
| Fwd PE | 37.33 | ||
| P/S | 12.52 | ||
| P/FCF | 61.41 | ||
| P/OCF | 57.55 | ||
| P/B | 20.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.76 |
EPS(TTM)23.47
EY1.91%
EPS(NY)32.91
Fwd EY2.68%
FCF(TTM)20.01
FCFY1.63%
OCF(TTM)21.35
OCFY1.74%
SpS98.12
BVpS58.72
TBVpS-16.8
PEG (NY)1.5
PEG (5Y)1.42
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%
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-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 | 13.73 |
F-Score7
WACC8.55%
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)46.69%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%47.34%
EPS Next Y34.81%
EPS Next 2Y28.83%
EPS Next 3Y26.05%
EPS Next 5Y21.86%
Revenue 1Y (TTM)14.84%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
Revenue Next Year15.8%
Revenue Next 2Y14.33%
Revenue Next 3Y13.21%
Revenue Next 5Y12.01%
EBIT growth 1Y42.28%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year38.09%
EBIT Next 3Y25.42%
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