NasdaqGS:NFLX

Stock Analysis Report

Executive Summary

Netflix, Inc. provides Internet entertainment services.

Snowflake

Fundamentals

High growth potential with questionable track record.


Similar Companies

Share Price & News

How has Netflix's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

5.0%

NFLX

2.7%

US Entertainment

3.4%

US Market


1 Year Return

-17.9%

NFLX

-0.4%

US Entertainment

5.4%

US Market

Return vs Industry: NFLX underperformed the US Entertainment industry which returned -0.4% over the past year.

Return vs Market: NFLX underperformed the US Market which returned 5.4% over the past year.


Shareholder returns

NFLXIndustryMarket
7 Day5.0%2.7%3.4%
30 Day-3.4%-3.7%-1.0%
90 Day-21.6%-7.3%-0.4%
1 Year-17.9%-17.9%0.3%-0.4%7.7%5.4%
3 Year139.3%139.3%56.3%51.3%46.2%36.8%
5 Year443.7%443.7%93.7%81.6%65.6%47.5%

Price Volatility Vs. Market

How volatile is Netflix's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Netflix undervalued compared to its fair value and its price relative to the market?

15.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: NFLX ($284.25) is trading below our estimate of fair value ($337.25)

Significantly Undervalued: NFLX is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NFLX is poor value based on its PE Ratio (107.8x) compared to the Entertainment industry average (39.8x).

PE vs Market: NFLX is poor value based on its PE Ratio (107.8x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: NFLX is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: NFLX is overvalued based on its PB Ratio (20.4x) compared to the US Entertainment industry average (2.7x).


Next Steps

Future Growth

How is Netflix forecast to perform in the next 1 to 3 years based on estimates from 38 analysts?

37.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NFLX's forecast earnings growth (37.9% per year) is above the savings rate (2.7%).

Earnings vs Market: NFLX's earnings (37.9% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NFLX's revenue (17.5% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: NFLX's revenue (17.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: NFLX's Return on Equity is forecast to be high in 3 years time (31.3%)


Next Steps

Past Performance

How has Netflix performed over the past 5 years?

46.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NFLX's earnings have grown significantly by 46.8% per year over the past 5 years.

Accelerating Growth: NFLX's earnings growth over the past year (16.4%) is below its 5-year average (46.8% per year).

Earnings vs Industry: NFLX earnings growth over the past year (16.4%) underperformed the Entertainment industry 31.1%.


Return on Equity

High ROE: NFLX's Return on Equity (18.9%) is considered low.


Return on Assets

ROA vs Industry: NFLX's Return on Assets is below or equal to the Entertainment industry average last year.


Return on Capital Employed

ROCE Improving: NFLX has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Netflix's financial position?


Financial Position Analysis

Short Term Liabilities: NFLX's short term assets ($5.9B) do not cover its short term liabilities ($6.9B)

Long Term Liabilities: NFLX's short term assets (5.9B) do not cover its long term liabilities (17.1B)


Debt to Equity History and Analysis

Debt Level: NFLX's debt to equity ratio (206.3%) is considered high

Reducing Debt: NFLX's debt to equity ratio has increased from 53% to 206.3% over the past 5 years.

Debt Coverage: NFLX's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: NFLX's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet

Inventory Level: NFLX has a low level of unsold assets or inventory.

Debt Coverage by Assets: NFLX's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Netflix's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%3.8%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate NFLX's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NFLX's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if NFLX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NFLX's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NFLX's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Netflix's salary, the management and board of directors tenure and is there insider trading?

4.8yrs

Average management tenure


CEO

Wilmot Hastings (59yo)

21.1yrs

Tenure

US$36,080,417

Compensation

Mr. Wilmot Reed Hastings, Jr., is President of Netflix, Inc. and has been its Chairman and Chief Executive Officer from 1997 and September 1998 respectively. Mr. Hastings co-founded Netflix in 1997. In 199 ...


CEO Compensation Analysis

Compensation vs. Market: Wilmot's total compensation ($USD36.08M) is about average for companies of similar size in the US market ($USD11.18M).

Compensation vs Earnings: Wilmot's compensation has increased by more than 20% in the past year.


Management Age and Tenure

4.8yrs

Average Tenure

50yo

Average Age

Experienced Management: NFLX's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

7.8yrs

Average Tenure

59yo

Average Age

Experienced Board: NFLX's board of directors are considered experienced (7.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Spencer Neumann (49yo)

    Chief Financial Officer

    • Tenure: 0.8yrs
  • Wilmot Hastings (59yo)

    Co-Founder

    • Tenure: 21.1yrs
    • Compensation: US$36.08m
  • Greg Peters (48yo)

    Chief Product Officer

    • Tenure: 6.3yrs
    • Compensation: US$14.82m
  • Ted Sarandos (54yo)

    Chief Content Officer

    • Tenure: 19.6yrs
    • Compensation: US$29.65m
  • Bill Holmes (49yo)

    Chief Business Development Officer

    • Tenure: 0yrs
  • Spencer Wang

    Vice President of Finance & Investor Relations

    • Tenure: 4.8yrs
  • David Hyman (53yo)

    General Counsel & Secretary

    • Tenure: 17.8yrs
    • Compensation: US$5.11m
  • Rachel Whetstone (51yo)

    Chief Communications Officer

    • Tenure: 1.2yrs
  • Jessica Neal (42yo)

    Chief Talent Officer

    • Tenure: 2yrs
  • Christie Fleischer

    Global Head of Consumer Products

    • Tenure: 1.1yrs

Board Members

  • Jay Hoag (61yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$377.86k
  • Tim Haley (63yo)

    Independent Director

    • Tenure: 21.3yrs
    • Compensation: US$377.86k
  • Rich Barton (51yo)

    Independent Director

    • Tenure: 17.4yrs
    • Compensation: US$377.86k
  • Ann Mather (59yo)

    Independent Director

    • Tenure: 9.1yrs
    • Compensation: US$377.86k
  • Wilmot Hastings (59yo)

    Co-Founder

    • Tenure: 21.1yrs
    • Compensation: US$36.08m
  • Leslie Kilgore (54yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$377.86k
  • Brad Smith (60yo)

    Director

    • Tenure: 4.6yrs
    • Compensation: US$377.86k
  • Susan Rice (54yo)

    Independent Director

    • Tenure: 1.6yrs
    • Compensation: US$285.98k
  • Anne Sweeney (61yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$377.86k
  • Rodolphe Belmer (50yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$347.15k

Company Information

Netflix, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Netflix, Inc.
  • Ticker: NFLX
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Movies and Entertainment
  • Sector: Media
  • Market Cap: US$124.455b
  • Shares outstanding: 437.83m
  • Website: https://www.netflix.com

Number of Employees


Location

  • Netflix, Inc.
  • 100 Winchester Circle
  • Los Gatos
  • California
  • 95032
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NFLXSWX (SIX Swiss Exchange)YesCommon StockCHCHFMay 2002
NFLXNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 2002
NFCDB (Deutsche Boerse AG)YesCommon StockDEEURMay 2002
NFLXBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDMay 2002
NFLX *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 2002
NFCXTRA (XETRA Trading Platform)YesCommon StockDEEURMay 2002
0QYILSE (London Stock Exchange)YesCommon StockGBUSDMay 2002
NFLXBIT (Borsa Italiana)YesCommon StockITEURMay 2002
NFLXWBAG (Wiener Boerse AG)YesCommon StockATEURMay 2002
NFLX34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM SHSBRBRLAug 2012
NFLXBASE (Buenos Aires Stock Exchange)CEDEAR EACH 16 REP 1 COM USD0.001ARARSApr 2019

Biography

Netflix, Inc. provides Internet entertainment services. The company operates in three segments: Domestic streaming, International streaming, and Domestic DVD. It offers TV series, documentaries, and featur ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 23:39
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.