Netflix (NFLX) AI Stock Analysis

• Market Cap: $521.37B
• Dividend Yield: N/A
• Average Volume (3M): 2.88M
• Price to Earnings (P/E): 52.3
• Beta (1Y): 1.19
• Revenue Growth: 14.28%
• EPS Growth: 46.86%
• Country: US
• Employees: 14,000
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 7.19
• Shares Outstanding: 424,926,360
• 10 Day Avg. Volume: 3,319,340
• 30 Day Avg. Volume: 2,880,175
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 14.17
• Enterprise Value/Gross Profit: 29.23
• Enterprise Value/Ebitda: 20.89
• 1Y Price Target: $1,401.17
• Price Target Upside: 14.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 36

• Rating: 78 Outperform
• Price Target: $1,372.00 ▲(11.78% Upside)

Netflix's strong financial performance and positive earnings call are the most significant factors driving the score. However, high valuation and mixed technical indicators slightly dampen the overall outlook. The company's strategic focus on content and advertising is promising, but engagement growth challenges need to be addressed.

Positive Factors

Revenue Growth

Raising revenue guidance indicates strong underlying business performance and potential for sustained growth, driven by content and ad sales.

Content Strategy

A robust content slate with popular titles enhances subscriber engagement and retention, reinforcing Netflix's competitive edge in streaming.

Cash Flow Generation

Strong cash flow generation supports Netflix's ability to invest in content and technology, ensuring long-term operational and strategic flexibility.

Negative Factors

Engagement Growth Challenges

Stagnant engagement growth could hinder Netflix's ability to maximize subscriber value and compete effectively in a crowded streaming market.

Domestic Viewing Share Stagnation

Stagnant domestic viewing share amidst rising competition may limit Netflix's market dominance and growth potential in its largest market.

Debt Management

Moderate leverage suggests potential risk if not managed properly, which could impact financial flexibility and long-term strategic initiatives.

Netflix Business Overview & Revenue Model

Company Description

Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. The company provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services in the United States. The company has approximately 222 million paid members in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.

How the Company Makes Money

Netflix primarily generates revenue through its subscription-based model, where users pay a monthly fee to access its vast library of content. The company offers several subscription tiers, each with varying price points and features such as the number of simultaneous streams and video quality. Additionally, Netflix invests heavily in producing original content, which not only attracts new subscribers but also retains existing ones, contributing significantly to its revenue growth. The company also engages in partnerships with various device manufacturers and telecom operators to enhance its service accessibility, further driving its subscriber base and revenue. Moreover, Netflix has explored options for licensing its original content to other platforms, though the bulk of its earnings remains focused on subscriptions.

Netflix Financial Statement Overview

Summary

Netflix showcases strong financial health, with significant revenue and profit growth, efficient cost management, and effective cash flow generation. The income statement is robust, but the balance sheet indicates moderate leverage, suggesting room for improvement in debt management.

Income Statement

Netflix's income statement shows robust growth and profitability. The gross profit margin for TTM is 48.5%, indicating efficient cost management. The net profit margin stands at 24.6%, with a strong trajectory of revenue growth at 6.9% compared to the previous year. EBIT and EBITDA margins are impressive at 29.5% and 42.4% respectively, reflecting effective operational profitability. The company demonstrates strong revenue growth and profitability metrics, positioning it well within the entertainment industry.

Balance Sheet

The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.58, showing moderate leverage. The return on equity (ROE) for TTM is 41.1%, highlighting high profitability relative to equity. An equity ratio of 47.0% indicates a balanced capital structure. While the company maintains a healthy equity position, there is room for improvement in managing debt levels to further optimize financial stability.

Cash Flow

Netflix's cash flow statement reveals a strong ability to generate cash, with a free cash flow growth rate of 22.8% over the previous year. The operating cash flow to net income ratio is 0.89, signifying efficient cash conversion. The free cash flow to net income ratio is also favorable at 0.83, indicating substantial cash flow generation relative to profits. The company exhibits robust cash flow performance, supporting its growth and operational needs effectively.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	39.00B	33.72B	31.62B	29.70B	25.00B
Gross Profit	17.96B	14.01B	12.45B	12.37B	9.72B
EBITDA	26.31B	21.51B	20.33B	19.04B	15.51B
Net Income	8.71B	5.41B	4.49B	5.12B	2.76B
Balance Sheet
Total Assets	53.63B	48.73B	48.59B	44.58B	39.28B
Cash, Cash Equivalents and Short-Term Investments	9.58B	7.14B	6.06B	6.03B	8.21B
Total Debt	17.99B	16.97B	16.93B	18.12B	18.51B
Total Liabilities	28.89B	28.14B	27.82B	28.74B	28.22B
Stockholders Equity	24.74B	20.59B	20.78B	15.85B	11.07B
Cash Flow
Free Cash Flow	6.92B	6.93B	1.62B	-131.97M	1.93B
Operating Cash Flow	7.36B	7.27B	2.03B	392.61M	2.43B
Investing Cash Flow	-2.18B	541.75M	-2.08B	-1.34B	-505.35M
Financing Cash Flow	-4.07B	-5.95B	-664.25M	-1.15B	1.24B

Netflix Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1227.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NFLX, the sentiment is Positive. The current price of 1227.37 is above the 20-day moving average (MA) of 1224.50, above the 50-day MA of 1212.87, and above the 200-day MA of 1081.56, indicating a bullish trend. The MACD of 0.38 indicates Positive momentum. The RSI at 51.85 is Neutral, neither overbought nor oversold. The STOCH value of 50.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NFLX.

Netflix Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NFLX	78 Outperform	$521.37B	52.29	43.55%	―	14.28%	46.86%
FOXA	78 Outperform	26.30B	12.35	18.92%	0.88%	16.60%	57.39%
ROKU	77 Outperform	14.59B	-233.61	-2.37%	―	17.32%	87.79%
DIS	76 Outperform	202.38B	17.84	10.58%	0.89%	5.00%	144.65%
WBD	68 Neutral	48.55B	64.93	2.13%	―	-3.79%	0.00%
PSKY	68 Neutral	19.81B	-735.57	-0.08%	1.07%	-1.75%	99.73%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%