NETFLIX INC (NFLX) Stock Fundamental Analysis
USA - NASDAQ:NFLX - US64110L1061 - Common Stock
1112.17 USD
-42.06 (-3.64%)
1116.97 USD
+4.8 (+0.43%)
We assign a fundamental rating of 7 out of 10 to NFLX. NFLX was compared to 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. NFLX is growing strongly while it is still valued neutral. This is a good combination! These ratings could make NFLX a good candidate 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.
Each year in the past 5 years NFLX had a positive operating cash flow.
1.2 Ratios
NFLX's Return On Assets of 18.99% is amongst the best of the industry. NFLX outperforms 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.
NFLX has a Return On Invested Capital of 24.41%. This is amongst the best in the industry. NFLX outperforms 98.73% of its industry peers.
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 last Return On Invested Capital (24.41%) for NFLX is above the 3 year average (16.17%), which is a sign of increasing profitability.
| 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 has a Profit Margin of 24.05%. This is amongst the best in the industry. NFLX outperforms 94.94% of its industry peers.
In the last couple of years the Profit Margin of NFLX has grown nicely.
NFLX's Operating Margin of 29.14% is amongst the best of the industry. NFLX outperforms 97.47% of its industry peers.
NFLX's Operating Margin has improved in the last couple of years.
NFLX has a Gross Margin of 48.09%. This is comparable to the rest of the industry: NFLX outperforms 58.23% of its industry peers.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NFLX is creating value.
NFLX has less shares outstanding than it did 1 year ago.
The number of shares outstanding for NFLX has been reduced compared to 5 years ago.
The debt/assets ratio for NFLX has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 12.42 indicates that NFLX is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 12.42, NFLX belongs to the best of the industry, outperforming 93.67% 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.
NFLX has a Debt to FCF ratio of 1.61. This is in the better half of the industry: NFLX outperforms 78.48% of its industry peers.
NFLX has a Debt/Equity ratio of 0.56. This is a neutral value indicating NFLX is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.56, NFLX is in line with its industry, 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 | 12.42 |
ROIC/WACC2.83
WACC8.63%
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.
With a decent Current ratio value of 1.33, NFLX is doing good in the industry, outperforming 60.76% of the companies in the same industry.
A Quick Ratio of 1.33 indicates that NFLX should not have too much problems paying 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.
Measured over the past years, NFLX shows a very strong growth in Earnings Per Share. The EPS has been growing by 36.86% on average per year.
The Revenue has grown by 15.41% 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)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
The Earnings Per Share is expected to grow by 22.82% on average over the next years. This is a very strong growth
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
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.
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
A Price/Earnings ratio of 46.46 indicates a quite expensive valuation of NFLX.
Based on the Price/Earnings ratio, NFLX is valued a bit cheaper than 72.15% of the companies in the same industry.
NFLX is valuated expensively when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
NFLX is valuated quite expensively with a Price/Forward Earnings ratio of 33.68.
Based on the Price/Forward Earnings ratio, NFLX is valued a bit cheaper than the industry average as 69.62% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of NFLX to the average of the S&P500 Index (34.59), we can say NFLX is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.46 | ||
| Fwd PE | 33.68 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NFLX is valued a bit cheaper than the industry average as 64.56% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NFLX indicates a somewhat cheap valuation: NFLX is cheaper than 64.56% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.7 | ||
| EV/EBITDA | 16.59 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as NFLX's earnings are expected to grow with 25.74% in the coming years.
PEG (NY)1.5
PEG (5Y)1.26
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 |
1112.17
-42.06 (-3.64%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners86.3%
Inst Owner Change-1.83%
Ins Owners0.03%
Ins Owner Change-0.1%
Market Cap472.59B
Revenue(TTM)43.38B
Net Income(TTM)10.43B
Analysts80.7
Price TargetN/A
Short Float %1.43%
Short Ratio1.79
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 | 46.46 | ||
| Fwd PE | 33.68 | ||
| P/S | 10.89 | ||
| P/FCF | 52.7 | ||
| P/OCF | 49.36 | ||
| P/B | 18.21 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.59 |
EPS(TTM)23.94
EY2.15%
EPS(NY)33.02
Fwd EY2.97%
FCF(TTM)21.1
FCFY1.9%
OCF(TTM)22.53
OCFY2.03%
SpS102.08
BVpS61.08
TBVpS-15.73
PEG (NY)1.5
PEG (5Y)1.26
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 | 12.42 |
F-Score8
WACC8.63%
ROIC/WACC2.83
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 7 / 10 to NFLX.
What is the valuation status for NFLX stock?
ChartMill assigns a valuation rating of 5 / 10 to NETFLIX INC (NFLX). This can be considered as Fairly Valued.
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 46.46 and the Price/Book (PB) ratio is 18.21.