Netflix (NFLX) AI Stock Analysis

• Market Cap: $510.87B
• Dividend Yield: N/A
• Average Volume (3M): 2.81M
• Price to Earnings (P/E): 51.2
• Beta (1Y): 1.20
• 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: 2,968,386
• 30 Day Avg. Volume: 2,810,055
• 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: 1.16
• Enterprise Value/Revenue: 14.17
• Enterprise Value/Gross Profit: 29.23
• Enterprise Value/Ebitda: 20.89
• 1Y Price Target: $1,393.77
• Price Target Upside: 15.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 37

• Rating: 78 Outperform
• Price Target: $1,372.00 ▲(14.12% Upside)

Netflix's overall stock score is driven by strong financial performance and a positive earnings call outlook. The company's robust revenue growth, effective cost management, and strategic content investments position it well for future growth. However, high valuation and mixed technical indicators present some risks. The absence of corporate events in the analysis did not impact the score.

Positive Factors

Revenue Growth

The raised revenue guidance reflects strong business fundamentals and effective strategies, indicating continued market expansion and subscriber growth.

Ad Sales Growth

Doubling ad sales revenue demonstrates Netflix's successful diversification of income streams, enhancing long-term financial stability and growth potential.

Strategic Partnerships

The partnership with Amazon enhances Netflix's advertising capabilities, expanding its reach and attractiveness to advertisers, supporting sustained revenue growth.

Negative Factors

Engagement Growth Challenges

Stagnant engagement growth could limit Netflix's ability to increase subscriber retention and attract new users, impacting long-term revenue expansion.

Stagnation in Domestic Viewing Share

Stagnating domestic viewing share amidst rising competition may pressure Netflix's market position, challenging its growth and subscriber retention strategies.

Leadership Changes

The departure of a key executive could disrupt strategic initiatives and impact Netflix's ability to innovate and maintain competitive advantage in product development.

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: Negative
• Last Price: 1202.26
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 1202.26 is below the 20-day moving average (MA) of 1221.91, below the 50-day MA of 1216.25, and above the 200-day MA of 1074.78, indicating a neutral trend. The MACD of -0.99 indicates Positive momentum. The RSI at 45.03 is Neutral, neither overbought nor oversold. The STOCH value of 22.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NFLX.

Netflix Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NFLX	78 Outperform	$510.87B	51.23	43.55%	―	14.28%	46.86%
FOXA	78 Outperform	24.84B	11.97	18.92%	0.94%	16.60%	57.39%
ROKU	77 Outperform	13.84B	-221.51	-2.37%	―	17.32%	87.79%
DIS	76 Outperform	207.88B	18.13	10.58%	0.86%	5.00%	144.65%
WBD	68 Neutral	48.18B	64.44	2.13%	―	-3.79%	0.00%
PSKY	68 Neutral	19.78B	-734.39	-0.08%	1.08%	-1.75%	99.73%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%