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. 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. This makes NFLX very considerable 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.
In the past 5 years NFLX has always been profitable.
NFLX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of NFLX (17.80%) is better than 97.22% of its industry peers.
NFLX's Return On Equity of 38.58% is amongst the best of the industry. NFLX outperforms 93.06% of its industry peers.
NFLX has a better Return On Invested Capital (22.93%) than 97.22% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NFLX is significantly below the industry average of 22.90%.
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
Looking at the Profit Margin, with a value of 23.07%, NFLX belongs to the top of the industry, outperforming 94.44% of the companies in the same industry.
In the last couple of years the Profit Margin of NFLX has grown nicely.
The Operating Margin of NFLX (27.71%) is better than 97.22% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
NFLX has a Gross Margin (46.92%) which 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 | 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
NFLX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, NFLX has less shares outstanding
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
NFLX has an Altman-Z score of 14.25. This indicates that NFLX is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NFLX (14.25) is better than 97.22% of its industry peers.
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.
With a decent Debt to FCF ratio value of 2.02, NFLX is doing good in the industry, outperforming 76.39% of the companies in the same industry.
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 | 2.02 | ||
| Altman-Z | 14.25 |
ROIC/WACC2.59
WACC8.86%
2.3 Liquidity
A Current Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
With a Current ratio value of 1.20, NFLX perfoms like the industry average, outperforming 59.72% of the companies in the same industry.
NFLX has a Quick Ratio of 1.20. This is a normal value and indicates that NFLX is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of NFLX (1.20) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
NFLX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.84%, 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 15.00% 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)46.84%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%25.19%
Revenue 1Y (TTM)15%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%12.51%
3.2 Future
The Earnings Per Share is expected to grow by 20.15% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.09% on average over the next years. This is quite good.
EPS Next Y31.14%
EPS Next 2Y26.15%
EPS Next 3Y24.35%
EPS Next 5Y20.15%
Revenue Next Year14.37%
Revenue Next 2Y13.28%
Revenue Next 3Y12.53%
Revenue Next 5Y11.09%
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.
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
A Price/Earnings ratio of 61.30 indicates a quite expensive valuation of NFLX.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 70.83% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. NFLX is valued rather expensively when compared to this.
NFLX is valuated quite expensively with a Price/Forward Earnings ratio of 41.10.
Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than 66.67% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NFLX to the average of the S&P500 Index (21.90), we can say NFLX is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.3 | ||
| Fwd PE | 41.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
NFLX's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 74.14 | ||
| EV/EBITDA | 20.72 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of NFLX may justify a higher PE ratio.
A more expensive valuation may be justified as NFLX's earnings are expected to grow with 24.35% in the coming years.
PEG (NY)1.97
PEG (5Y)1.66
EPS Next 2Y26.15%
EPS Next 3Y24.35%
5. Dividend
5.1 Amount
No dividends for NFLX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1297.18
+12.32 (+0.96%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.57%
Inst Owner Change-49.56%
Ins Owners0.03%
Ins Owner Change3.06%
Market Cap552.04B
Analysts80.71
Price Target1210.69 (-6.67%)
Short Float %1.68%
Short Ratio1.9
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)5.76%
PT rev (3m)9.79%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)11.9%
EPS NY rev (1m)0.02%
EPS NY rev (3m)2.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.18%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.3 | ||
| Fwd PE | 41.1 | ||
| P/S | 13.74 | ||
| P/FCF | 74.14 | ||
| P/OCF | 69.54 | ||
| P/B | 22.97 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.72 |
EPS(TTM)21.16
EY1.63%
EPS(NY)31.56
Fwd EY2.43%
FCF(TTM)17.5
FCFY1.35%
OCF(TTM)18.65
OCFY1.44%
SpS94.4
BVpS56.46
TBVpS-18.83
PEG (NY)1.97
PEG (5Y)1.66
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 | 14.25 |
F-Score8
WACC8.86%
ROIC/WACC2.59
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)46.84%
EPS 3Y20.83%
EPS 5Y36.86%
EPS Q2Q%25.19%
EPS Next Y31.14%
EPS Next 2Y26.15%
EPS Next 3Y24.35%
EPS Next 5Y20.15%
Revenue 1Y (TTM)15%
Revenue growth 3Y9.51%
Revenue growth 5Y14.11%
Sales Q2Q%12.51%
Revenue Next Year14.37%
Revenue Next 2Y13.28%
Revenue Next 3Y12.53%
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