NETFLIX INC (NFLX) Stock Fundamental Analysis
NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD
NFLX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 72 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 not overvalued while it is showing excellent growth. This is an interesting combination. This makes NFLX very considerable 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.
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 (17.80%) is better than 97.22% of its industry peers.
Looking at the Return On Equity, with a value of 38.58%, NFLX belongs to the top of the industry, outperforming 93.06% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 22.93%, NFLX belongs to the top of the industry, outperforming 97.22% 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 23.07%.
The last Return On Invested Capital (22.93%) for NFLX is above the 3 year average (16.17%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.8% | ||
| ROE | 38.58% | ||
| ROIC | 22.93% |
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 Profit Margin of 23.07%. This is amongst the best in the industry. NFLX outperforms 94.44% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX's Operating Margin of 27.71% is amongst the best of the industry. NFLX outperforms 97.22% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 46.92%, NFLX is in line with its industry, outperforming 54.17% of the companies in the same industry.
In the last couple of years the Gross Margin of NFLX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.71% | ||
| PM (TTM) | 23.07% | ||
| GM | 46.92% |
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.
Compared to 1 year ago, NFLX has less shares outstanding
The number of shares outstanding for NFLX has been reduced compared to 5 years ago.
NFLX has a better debt/assets ratio than last year.
2.2 Solvency
NFLX has an Altman-Z score of 14.04. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 14.04, NFLX belongs to the top of the industry, outperforming 98.61% of the companies in the same industry.
NFLX has a debt to FCF ratio of 2.02. This is a good value and a sign of high solvency as NFLX would need 2.02 years to pay back of all of its debts.
NFLX's Debt to FCF ratio of 2.02 is fine compared to the rest of the industry. NFLX outperforms 76.39% of its industry peers.
NFLX has a Debt/Equity ratio of 0.58. This is a neutral value indicating NFLX is somewhat dependend on debt financing.
The Debt to Equity ratio of NFLX (0.58) is comparable to the rest of the industry.
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 | 2.02 | ||
| Altman-Z | 14.04 |
ROIC/WACC2.56
WACC8.96%
2.3 Liquidity
A Current Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
The Current ratio of NFLX (1.20) is comparable to the rest of the industry.
A Quick Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
NFLX's Quick ratio of 1.20 is fine compared to the rest of the industry. NFLX outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 46.69% 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
Looking at the last year, NFLX shows a quite strong growth in Revenue. The Revenue has grown by 15.65% in the last year.
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)15.65%
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 20.15% on average per year.
Based on estimates for the next years, NFLX will show a quite strong growth in Revenue. The Revenue will grow by 11.09% on average per year.
EPS Next Y31.57%
EPS Next 2Y26.62%
EPS Next 3Y24.69%
EPS Next 5Y20.15%
Revenue Next Year14.43%
Revenue Next 2Y13.4%
Revenue Next 3Y12.59%
Revenue Next 5Y11.09%
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 51.52, NFLX can be considered very expensive at the moment.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 72.22% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.50, NFLX is valued quite expensively.
With a Price/Forward Earnings ratio of 38.03, 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 65.28% of the companies in the same industry.
NFLX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.52 | ||
| Fwd PE | 38.03 |
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 62.50% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 69.11 | ||
| EV/EBITDA | 20.36 |
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 24.69% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.63
PEG (5Y)1.4
EPS Next 2Y26.62%
EPS Next 3Y24.69%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1209.24
-64.93 (-5.1%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.57%
Inst Owner Change-0.01%
Ins Owners0.03%
Ins Owner Change-1.63%
Market Cap514.62B
Analysts80.71
Price Target1280.9 (5.93%)
Short Float %1.61%
Short Ratio2.14
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)6.61%
Min EPS beat(2)-0.27%
Max EPS beat(2)13.49%
EPS beat(4)3
Avg EPS beat(4)4.4%
Min EPS beat(4)-0.27%
Max EPS beat(4)13.49%
EPS beat(8)6
Avg EPS beat(8)5.37%
EPS beat(12)8
Avg EPS beat(12)1.45%
EPS beat(16)11
Avg EPS beat(16)6.88%
Revenue beat(2)0
Avg Revenue beat(2)-1.18%
Min Revenue beat(2)-1.7%
Max Revenue beat(2)-0.66%
Revenue beat(4)0
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-1.7%
Max Revenue beat(4)-0.66%
Revenue beat(8)0
Avg Revenue beat(8)-1.52%
Revenue beat(12)0
Avg Revenue beat(12)-1.65%
Revenue beat(16)0
Avg Revenue beat(16)-1.76%
PT rev (1m)2.66%
PT rev (3m)9.79%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)12.67%
EPS NY rev (1m)0.35%
EPS NY rev (3m)3.31%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)1.28%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.52 | ||
| Fwd PE | 38.03 | ||
| P/S | 12.81 | ||
| P/FCF | 69.11 | ||
| P/OCF | 64.83 | ||
| P/B | 21.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.36 |
EPS(TTM)23.47
EY1.94%
EPS(NY)31.79
Fwd EY2.63%
FCF(TTM)17.5
FCFY1.45%
OCF(TTM)18.65
OCFY1.54%
SpS94.4
BVpS56.46
TBVpS-18.83
PEG (NY)1.63
PEG (5Y)1.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.8% | ||
| ROE | 38.58% | ||
| ROCE | 26.27% | ||
| ROIC | 22.93% | ||
| ROICexc | 28.58% | ||
| ROICexgc | 496.42% | ||
| OM | 27.71% | ||
| PM (TTM) | 23.07% | ||
| GM | 46.92% | ||
| FCFM | 18.53% |
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 Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.02 | ||
| Debt/EBITDA | 0.52 | ||
| Cap/Depr | 3.12% | ||
| Cap/Sales | 1.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 29.5% | ||
| Profit Quality | 80.32% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 14.04 |
F-Score8
WACC8.96%
ROIC/WACC2.56
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 Y31.57%
EPS Next 2Y26.62%
EPS Next 3Y24.69%
EPS Next 5Y20.15%
Revenue 1Y (TTM)15.65%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%15.9%
Revenue Next Year14.43%
Revenue Next 2Y13.4%
Revenue Next 3Y12.59%
Revenue Next 5Y11.09%
EBIT growth 1Y41.41%
EBIT growth 3Y18.92%
EBIT growth 5Y31.95%
EBIT Next Year33.47%
EBIT Next 3Y22.92%
EBIT Next 5Y19.31%
FCF growth 1Y153.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y141.85%
OCF growth 3Y165.66%
OCF growth 5YN/A