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NETFLIX INC (NFLX) Stock Fundamental Analysis

NASDAQ:NFLX - Nasdaq - US64110L1061 - Common Stock - Currency: USD

1289.62  -7.56 (-0.58%)

After market: 1289.62 0 (0%)

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to NFLX. NFLX was compared to 72 industry peers in the Entertainment industry. NFLX gets an excellent profitability rating and is at the same time showing great financial health properties. 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.


Dividend Valuation Growth Profitability Health

8

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.
NFLX had a positive operating cash flow in each of the past 5 years.
NFLX Yearly Net Income VS EBIT VS OCF VS FCFNFLX Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B 6B 8B 10B

1.2 Ratios

With an excellent Return On Assets value of 17.80%, NFLX belongs to the best of the industry, outperforming 97.22% of the companies in the same industry.
NFLX has a better Return On Equity (38.58%) than 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 3 year average ROIC (16.17%) for NFLX is below the current ROIC(22.93%), indicating increased profibility in the last year.
Industry RankSector 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%
NFLX Yearly ROA, ROE, ROICNFLX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

The Profit Margin of NFLX (23.07%) is better than 94.44% of its industry peers.
NFLX's Profit Margin has improved in the last couple of years.
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.
NFLX has a Gross Margin of 46.92%. This is comparable to the rest of the industry: NFLX outperforms 54.17% of its industry peers.
NFLX's Gross Margin has improved in the last couple of years.
Industry RankSector 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%
NFLX Yearly Profit, Operating, Gross MarginsNFLX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

7

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
NFLX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NFLX has an improved debt to assets ratio.
NFLX Yearly Shares OutstandingNFLX Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M
NFLX Yearly Total Debt VS Total AssetsNFLX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B 40B 50B

2.2 Solvency

An Altman-Z score of 14.25 indicates that NFLX is not in any danger for bankruptcy at the moment.
NFLX's Altman-Z score of 14.25 is amongst the best of the industry. NFLX outperforms 97.22% of its industry peers.
The Debt to FCF ratio of NFLX is 2.02, which is a good value as it means it would take NFLX, 2.02 years of fcf income to pay off all of its debts.
NFLX has a better Debt to FCF ratio (2.02) than 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.
With a Debt to Equity ratio value of 0.58, NFLX perfoms like the industry average, outperforming 47.22% 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 RankSector Rank
Debt/Equity 0.58
Debt/FCF 2.02
Altman-Z 14.25
ROIC/WACC2.59
WACC8.85%
NFLX Yearly LT Debt VS Equity VS FCFNFLX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5B 10B 15B 20B

2.3 Liquidity

NFLX has a Current 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.
Looking at the Current ratio, with a value of 1.20, NFLX is in line with its industry, outperforming 59.72% of the companies in the same industry.
A Quick Ratio of 1.20 indicates that NFLX should not have too much problems paying its short term obligations.
The Quick ratio of NFLX (1.20) is better than 62.50% of its industry peers.
Industry RankSector Rank
Current Ratio 1.2
Quick Ratio 1.2
NFLX Yearly Current Assets VS Current LiabilitesNFLX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 46.84% 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
The Revenue has grown by 15.00% in the past year. This is quite good.
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)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

NFLX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.15% yearly.
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

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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.
NFLX Yearly Revenue VS EstimatesNFLX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 20B 40B 60B 80B
NFLX Yearly EPS VS EstimatesNFLX Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 20 40 60

4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 60.95 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 27.29. NFLX is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 40.86, the valuation of NFLX can be described as expensive.
Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.74, NFLX is valued quite expensively.
Industry RankSector Rank
PE 60.95
Fwd PE 40.86
NFLX Price Earnings VS Forward Price EarningsNFLX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

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 ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 73.71
EV/EBITDA 20.72
NFLX Per share dataNFLX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60 80

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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 24.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.96
PEG (5Y)1.65
EPS Next 2Y26.15%
EPS Next 3Y24.35%

0

5. Dividend

5.1 Amount

No dividends for NFLX!.
Industry RankSector Rank
Dividend Yield N/A

NETFLIX INC

NASDAQ:NFLX (7/7/2025, 8:00:02 PM)

After market: 1289.62 0 (0%)

1289.62

-7.56 (-0.58%)

Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)04-17 2025-04-17/amc
Earnings (Next)07-17 2025-07-17/amc
Inst Owners86.57%
Inst Owner Change-0.01%
Ins Owners0.03%
Ins Owner Change-1.63%
Market Cap548.82B
Analysts80.71
Price Target1210.69 (-6.12%)
Short Float %1.68%
Short Ratio1.9
Dividend
Industry RankSector 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 RankSector Rank
PE 60.95
Fwd PE 40.86
P/S 13.66
P/FCF 73.71
P/OCF 69.14
P/B 22.84
P/tB N/A
EV/EBITDA 20.72
EPS(TTM)21.16
EY1.64%
EPS(NY)31.56
Fwd EY2.45%
FCF(TTM)17.5
FCFY1.36%
OCF(TTM)18.65
OCFY1.45%
SpS94.4
BVpS56.46
TBVpS-18.83
PEG (NY)1.96
PEG (5Y)1.65
Profitability
Industry RankSector 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 RankSector 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
WACC8.85%
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