NETFLIX INC (NFLX)
US64110L1061 - Common Stock
NFLX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 72 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 overvalued while it is showing excellent growth. This is an interesting combination. 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.
NFLX had a positive operating cash flow in the past year.
Each year in the past 5 years NFLX has been profitable.
Of the past 5 years NFLX 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NFLX (14.88%) is better than 94.37% of its industry peers.
Looking at the Return On Equity, with a value of 34.25%, NFLX belongs to the top of the industry, outperforming 94.37% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 19.19%, NFLX belongs to the top of the industry, outperforming 95.77% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NFLX is significantly below the industry average of 88.68%.
The last Return On Invested Capital (19.19%) for NFLX is above the 3 year average (13.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 34.25% | ||
| ROIC | 19.19% |
ROA(3y)10.61%
ROA(5y)8.87%
ROE(3y)26.72%
ROE(5y)25.95%
ROIC(3y)13.36%
ROIC(5y)12.6%
1.3 Margins
The Profit Margin of NFLX (20.70%) is better than 94.37% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
With an excellent Operating Margin value of 25.65%, NFLX belongs to the best of the industry, outperforming 94.37% of the companies in the same industry.
NFLX's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 45.25%, NFLX is in line with its industry, outperforming 52.11% of the companies in the same industry.
NFLX's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.65% | ||
| PM (TTM) | 20.7% | ||
| GM | 45.25% |
OM growth 3Y-3.22%
OM growth 5Y15.2%
PM growth 3Y13.23%
PM growth 5Y15.9%
GM growth 3Y-1.37%
GM growth 5Y2.4%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NFLX 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.
The debt/assets ratio for NFLX is higher compared to a year ago.
2.2 Solvency
NFLX has an Altman-Z score of 9.82. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
NFLX has a Altman-Z score of 9.82. This is amongst the best in the industry. NFLX outperforms 97.18% of its industry peers.
NFLX has a debt to FCF ratio of 2.24. This is a good value and a sign of high solvency as NFLX would need 2.24 years to pay back of all of its debts.
The Debt to FCF ratio of NFLX (2.24) is better than 81.69% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that NFLX is somewhat dependend on debt financing.
NFLX has a Debt to Equity ratio (0.62) 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 | 0.62 | ||
| Debt/FCF | 2.24 | ||
| Altman-Z | 9.82 |
ROIC/WACC2.17
WACC8.86%
2.3 Liquidity
NFLX has a Current Ratio of 1.13. 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 1.13. This is comparable to the rest of the industry: NFLX outperforms 56.34% of its industry peers.
NFLX has a Quick Ratio of 1.13. 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 1.13 is in line compared to the rest of the industry. NFLX outperforms 56.34% 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 | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 76.35%, which is quite impressive.
NFLX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.98% yearly.
The Revenue has grown by 14.80% in the past year. This is quite good.
The Revenue has been growing by 16.38% on average over the past years. This is quite good.
EPS 1Y (TTM)76.35%
EPS 3Y25.4%
EPS 5Y34.98%
EPS Q2Q%44.77%
Revenue 1Y (TTM)14.8%
Revenue growth 3Y10.5%
Revenue growth 5Y16.38%
Sales Q2Q%15.02%
3.2 Future
NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.29% yearly.
The Revenue is expected to grow by 10.95% on average over the next years. This is quite good.
EPS Next Y67.91%
EPS Next 2Y42.12%
EPS Next 3Y33.94%
EPS Next 5Y24.29%
Revenue Next Year15.72%
Revenue Next 2Y14.06%
Revenue Next 3Y12.92%
Revenue Next 5Y10.95%
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
A Price/Earnings ratio of 50.79 indicates a quite expensive valuation of NFLX.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 69.01% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.65. NFLX is valued rather expensively when compared to this.
NFLX is valuated quite expensively with a Price/Forward Earnings ratio of 37.00.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 66.20% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.56. NFLX is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.79 | ||
| Fwd PE | 37 |
4.2 Price Multiples
67.61% of the companies in the same industry are more expensive than NFLX, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 64.79% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.84 | ||
| EV/EBITDA | 15.39 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as NFLX's earnings are expected to grow with 33.94% in the coming years.
PEG (NY)0.75
PEG (5Y)1.45
EPS Next 2Y42.12%
EPS Next 3Y33.94%
5. Dividend
5.1 Amount
NFLX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NETFLIX INC
NASDAQ:NFLX (11/21/2024, 4:52:58 PM)
After market: 897.48 0 (0%)897.48
+13.63 (+1.54%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap383.64B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.79 | ||
| Fwd PE | 37 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.75
PEG (5Y)1.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 34.25% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 25.65% | ||
| PM (TTM) | 20.7% | ||
| GM | 45.25% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)76.35%
EPS 3Y25.4%
EPS 5Y
EPS Q2Q%
EPS Next Y67.91%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)14.8%
Revenue growth 3Y10.5%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y