Netflix Stock Analysis, Valuation (NASDAQ:NFLX)

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$187.35 $1.43 (0.76%) NFLX stock closing price Sep 22, 2017 (Closing)
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Netflix
Updated on : Sep 22, 2017
previous close
NFLX 187.4 (0%)
S&P 500 2502.2 (0%)
Closing Price On: Sep 22, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Broadcasting-Radio-TV
Sector :
Consumer Discretionary
5 Quarter Revenue
Revenue Growth
2017-Q2
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
24.1%
Operating Profit
Operating Margin:
6.3%
Sector Average:
11.3%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
4.84B
Debt/Equity Ratio:
 1.55
Compared to the industry
Cash Flow
Operating cash flow:
-$534.5M
Net Income:
$65.6M
PROS      CONS
Recent Growth
Long Term Growth
ROE
Operating Margins
Net Margins
High Debt Burden
Cash Flow
FCF Margin
PE Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
NFLX PS :
7.9
Industry PS :
1.6
Sector:   Consumer Discretionary.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
7.8%
Return on Equity:
13.2%
Free Cash Flow Margin:
-21.5%
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Netflix Stock Analysis

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View Netflix stock analysis video. This is our analyst opinion covering the buy and sell arguments for NFLX stock.

Netflix, Inc. Stock Rating 2.1/5

Our Netflix stock opinion is based on fundamentals of the company. This Netflix stock analysis is based on latest 2017 Q2 earnings. The stock price analysis takes into account the company's valuation metrics.

Should you buy NFLX stock?

  • Netflix sales grew by 32.3% year on year in 2017 Q2.
  • Long term revenue growth has been strong with a 5 year compounded annual growth of 24.1%.
  • The LTM ROE of 13.2% for Netflix is attractive.

Should you sell NFLX stock?

  • Netflix had a poor average operating margin of 6.3% over the last 4 quarters.
  • Netflix's Net margins were poor at 3.6% in the last twelve months.
  • With a debt/equity ratio of  1.55, Netflix is highly leveraged in comparison to Consumer Discretionary peers.
  • The NFLX stock currently trades at a PE of 228.5, which is expensive, compared to the industry average of 21.2.
  • The company is trading at a price to sales multiple of 7.9, which is overvalued in comparison to the Broadcasting-Radio-TV industry average multiple of 1.6.
  • The company has negative Free Cash Flows (FCF), with a negative FCF margin of -21.5%.

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