NETFLIX INC (NFLX) Stock Fundamental Analysis
USA - NASDAQ:NFLX - US64110L1061 - Common Stock
114.09 USD
+3.8 (+3.45%)
114.24 USD
+0.15 (+0.13%)
Overall NFLX gets a fundamental rating of 8 out of 10. We evaluated NFLX against 79 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. An interesting combination arises when we look at growth and value: NFLX is growing strongly while it also seems undervalued. These ratings could make NFLX a good candidate for value and 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.
Each year in the past 5 years NFLX has been profitable.
In the past 5 years NFLX always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of NFLX (18.99%) is better than 93.67% of its industry peers.
NFLX's Return On Equity of 40.19% is amongst the best of the industry. NFLX outperforms 94.94% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.41%, NFLX belongs to the top of the industry, outperforming 98.73% 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 9.82%.
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's Profit Margin of 24.05% is amongst the best of the industry. NFLX outperforms 94.94% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
The Operating Margin of NFLX (29.14%) is better than 97.47% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
The Gross Margin of NFLX (48.09%) is comparable to the rest of the industry.
NFLX's Gross Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NFLX 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
An Altman-Z score of 3.64 indicates that NFLX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.64, NFLX is in the better half of the industry, outperforming 78.48% of the companies in the same industry.
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.
The Debt to FCF ratio of NFLX (1.61) is better than 78.48% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that NFLX is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.56, NFLX perfoms like the industry average, outperforming 46.84% 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 | 0.56 | ||
| Debt/FCF | 1.61 | ||
| Altman-Z | 3.64 |
ROIC/WACC3.2
WACC7.62%
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 of 1.33. This is in the better half of the industry: NFLX outperforms 60.76% of 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.
Looking at the Quick ratio, with a value of 1.33, NFLX is in the better half of the industry, outperforming 63.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.48%, which is quite impressive.
The Earnings Per Share has been growing by 36.86% 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 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
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.82% yearly.
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 11.77% on average per year.
EPS Next Y30.93%
EPS Next 2Y29.04%
EPS Next 3Y25.74%
EPS Next 5Y22.82%
Revenue Next Year15.91%
Revenue Next 2Y14.44%
Revenue Next 3Y13.28%
Revenue Next 5Y11.77%
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
The Price/Earnings ratio is 4.77, which indicates a rather cheap valuation of NFLX.
Based on the Price/Earnings ratio, NFLX is valued cheaper than 94.94% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.51. NFLX is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 3.46, which indicates a rather cheap valuation of NFLX.
Based on the Price/Forward Earnings ratio, NFLX is valued cheaper than 100.00% of the companies in the same industry.
NFLX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.77 | ||
| Fwd PE | 3.46 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NFLX indicates a rather cheap valuation: NFLX is cheaper than 93.67% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX indicates a rather cheap valuation: NFLX is cheaper than 94.94% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.41 | ||
| EV/EBITDA | 1.86 |
4.3 Compensation for Growth
NFLX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 25.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.15
PEG (5Y)0.13
EPS Next 2Y29.04%
EPS Next 3Y25.74%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
114.09
+3.8 (+3.45%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.3%
Inst Owner Change-0.49%
Ins Owners0.03%
Ins Owner Change-0.5%
Market Cap48.48B
Revenue(TTM)43.38B
Net Income(TTM)10.43B
Analysts80.7
Price TargetN/A
Short Float %N/A
Short Ratio1.54
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)0.03%
PT rev (3m)1.37%
EPS NQ rev (1m)0.91%
EPS NQ rev (3m)1.08%
EPS NY rev (1m)-2.94%
EPS NY rev (3m)-0.48%
Revenue NQ rev (1m)0.5%
Revenue NQ rev (3m)0.49%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.77 | ||
| Fwd PE | 3.46 | ||
| P/S | 1.12 | ||
| P/FCF | 5.41 | ||
| P/OCF | 5.06 | ||
| P/B | 1.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 1.86 |
EPS(TTM)23.94
EY20.98%
EPS(NY)33.02
Fwd EY28.94%
FCF(TTM)21.1
FCFY18.5%
OCF(TTM)22.53
OCFY19.75%
SpS102.08
BVpS61.08
TBVpS-15.73
PEG (NY)0.15
PEG (5Y)0.13
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 | 3.64 |
F-Score8
WACC7.62%
ROIC/WACC3.2
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 Y30.93%
EPS Next 2Y29.04%
EPS Next 3Y25.74%
EPS Next 5Y22.82%
Revenue 1Y (TTM)15.41%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%17.16%
Revenue Next Year15.91%
Revenue Next 2Y14.44%
Revenue Next 3Y13.28%
Revenue Next 5Y11.77%
EBIT growth 1Y31.14%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year37.9%
EBIT Next 3Y25.13%
EBIT Next 5Y21.45%
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 8 / 10 to NFLX.
What is the valuation status for NFLX stock?
ChartMill assigns a valuation rating of 10 / 10 to NETFLIX INC (NFLX). This can be considered as Undervalued.
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 4.77 and the Price/Book (PB) ratio is 1.87.