Is Netflix Stock a Good Investment?
Netflix Investment Advice | NFLX |
- Examine Netflix's financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
- Research Netflix's leadership team and their track record. Good management can help Netflix navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
- Consider the overall health of the Movies & Entertainment space and any emerging trends that could impact Netflix's business and its evolving consumer preferences.
- Compare Netflix's performance and market position to its competitors. Analyze how Netflix is positioned in terms of product offerings, innovation, and market share.
- Check if Netflix pays a dividend and its dividend yield and payout ratio.
- Review what financial analysts are saying about Netflix's stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in Netflix stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if Netflix is a good investment.
Sell | Buy |
Strong Buy
Market Performance | Solid | Details | |
Volatility | Very steady | Details | |
Hype Condition | Stale | Details | |
Current Valuation | Undervalued | Details | |
Odds Of Distress | Low | Details | |
Economic Sensitivity | Barely shadows the market | Details | |
Investor Sentiment | Alarmed | Details | |
Analyst Consensus | Strong Buy | Details | |
Financial Leverage | Not Rated | Details | |
Reporting Quality (M-Score) | Unavailable | Details |
Examine Netflix Stock
Researching Netflix's stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 86.0% of the company shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 1.8. Netflix recorded earning per share (EPS) of 17.68. The entity had not issued any dividends in recent years. The firm had 7:1 split on the 15th of July 2015.
To determine if Netflix is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding Netflix's research are outlined below:
| Netflix is unlikely to experience financial distress in the next 2 years | |
| Over 86.0% of the company shares are owned by institutional investors | |
| Latest headline from channelnewsasia.com: Disposition of 311 shares by Kilgore Leslie J of Netflix at 201.07 subject to Rule 16b-3 |
Netflix Quarterly Accounts Payable |
|
Netflix uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in Netflix. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to Netflix's previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
| 16th of April 2024 Upcoming Quarterly Report | View | |
| 17th of July 2024 Next Financial Report | View | |
| 31st of March 2024 Next Fiscal Quarter End | View | |
| 28th of January 2025 Next Fiscal Year End | View | |
| 31st of December 2023 Last Quarter Report | View | |
| 31st of December 2023 Last Financial Announcement | View |
Earnings surprises can significantly impact Netflix's stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises Netflix's investors have experienced.
| Reported | Fiscal Date | Estimated EPS | Reported EPS | Surprise | |||
|---|---|---|---|---|---|---|---|
2003-01-15 | 2002-12-31 | -0.01 | -0.0117 | -0.0017 | 17 | ||
2003-04-17 | 2003-03-31 | -0.01 | -0.0142 | -0.0042 | 42 | ||
2002-10-18 | 2002-09-30 | -0.01 | -0.0055 | 0.0045 | 45 | ||
2015-10-14 | 2015-09-30 | 0.08 | 0.07 | -0.01 | 12 | ||
2015-04-15 | 2015-03-31 | 0.1 | 0.11 | 0.01 | 10 | ||
2013-07-22 | 2013-06-30 | 0.06 | 0.07 | 0.01 | 16 | ||
2013-04-22 | 2013-03-31 | 0.03 | 0.04 | 0.01 | 33 | ||
2012-10-23 | 2012-09-30 | 0.01 | 0.02 | 0.01 | 100 |
Know Netflix's Top Institutional Investors
Have you ever been surprised when a price of an equity instrument such as Netflix is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Netflix backward and forwards among themselves. Netflix's institutional investor refers to the entity that pools money to purchase Netflix's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
| Shares | International Assets Investment Management, Llc | 2024-09-30 | 5.8 M | Bank Of America Corp | 2024-06-30 | 5.5 M | Capital Research Global Investors | 2024-09-30 | 5.4 M | Norges Bank | 2024-06-30 | 5.3 M | Wellington Management Company Llp | 2024-06-30 | 4.9 M | Alliancebernstein L.p. | 2024-06-30 | 4.8 M | Baillie Gifford & Co Limited. | 2024-09-30 | 4.7 M | Fisher Asset Management, Llc | 2024-09-30 | 4.5 M | Loomis, Sayles & Company Lp | 2024-06-30 | 4.4 M | Vanguard Group Inc | 2024-09-30 | 37.3 M | Blackrock Inc | 2024-06-30 | 31.6 M |
Netflix's market capitalization trends
The company currently falls under 'Mega-Cap' category with a current market capitalization of 377.81 B.Market Cap |
|
Netflix's profitablity analysis
| Last Reported | Projected for Next Year | ||
| Return On Tangible Assets | 0.15 | 0.16 | |
| Return On Capital Employed | 0.17 | 0.18 | |
| Return On Assets | 0.11 | 0.12 | |
| Return On Equity | 0.26 | 0.25 |
Determining Netflix's profitability involves analyzing its financial statements and using various financial metrics to determine if Netflix is a good buy. For example, gross profit margin measures Netflix's profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of Netflix's profitability and make more informed investment decisions.
Please note, the imprecision that can be found in Netflix's accounting process means that the reasonable investor should take a skeptical approach toward the financial statement analysis of Netflix. Check Netflix's Beneish M Score to see the likelihood of Netflix's management manipulating its earnings.
Evaluate Netflix's management efficiency
Netflix has return on total asset (ROA) of 0.1184 % which means that it generated a profit of $0.1184 on every $100 spent on assets. This is way below average. Similarly, it shows a return on stockholder's equity (ROE) of 0.3471 %, meaning that it created $0.3471 on every $100 dollars invested by stockholders. Netflix's management efficiency ratios could be used to measure how well Netflix manages its routine affairs as well as how well it operates its assets and liabilities. At this time, Netflix's Return On Tangible Assets are fairly stable compared to the past year. Return On Capital Employed is likely to rise to 0.18 in 2024, whereas Return On Equity is likely to drop 0.25 in 2024. At this time, Netflix's Total Assets are fairly stable compared to the past year. Other Current Assets is likely to rise to about 1.5 B in 2024, despite the fact that Other Assets are likely to grow to (983.8 M).| Last Reported | Projected for Next Year | ||
| Book Value Per Share | 46.63 | 48.96 | |
| Tangible Book Value Per Share | 17.81 | 18.70 | |
| Enterprise Value Over EBITDA | 10.34 | 9.82 | |
| Price Book Value Ratio | 10.44 | 9.89 | |
| Enterprise Value Multiple | 10.34 | 9.82 | |
| Price Fair Value | 10.44 | 9.89 | |
| Enterprise Value | 110.8 B | 116.3 B |
The decision-making processes within Netflix are key to its success in a competitive market. By evaluating these processes, we assess the stock's potential for future gains.
Beta 1.25 |
Basic technical analysis of Netflix Stock
As of the 21st of November, Netflix secures the Downside Deviation of 1.45, risk adjusted performance of 0.1515, and Mean Deviation of 1.29. In connection with fundamental indicators, the technical analysis model lets you check existing technical drivers of Netflix, as well as the relationship between them.Netflix's Outstanding Corporate Bonds
Netflix issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. Netflix uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Netflix bonds can be classified according to their maturity, which is the date when Netflix has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
| NETAPP INC Corp BondUS64110DAL82 | View | |
| US64110DAJ37 Corp BondUS64110DAJ37 | View | |
| US64110DAK00 Corp BondUS64110DAK00 | View | |
| NetFlix 4875 percent Corp BondUS64110LAS51 | View | |
| NetFlix 5875 percent Corp BondUS64110LAT35 | View | |
| NetFlix 5375 percent Corp BondUS64110LAU08 | View | |
| NetFlix 4375 percent Corp BondUS64110LAN64 | View | |
| NetFlix 4875 percent Corp BondUS64110LAV80 | View |
Understand Netflix's technical and predictive indicators
Using predictive indicators to make investment decisions involves analyzing Netflix's various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.
| Risk Adjusted Performance | 0.1515 | |||
| Market Risk Adjusted Performance | 0.5114 | |||
| Mean Deviation | 1.29 | |||
| Semi Deviation | 1.16 | |||
| Downside Deviation | 1.45 | |||
| Coefficient Of Variation | 518.37 | |||
| Standard Deviation | 1.94 | |||
| Variance | 3.78 | |||
| Information Ratio | 0.1439 | |||
| Jensen Alpha | 0.303 | |||
| Total Risk Alpha | 0.1447 | |||
| Sortino Ratio | 0.1933 | |||
| Treynor Ratio | 0.5014 | |||
| Maximum Drawdown | 13.04 | |||
| Value At Risk | (2.33) | |||
| Potential Upside | 2.8 | |||
| Downside Variance | 2.1 | |||
| Semi Variance | 1.33 | |||
| Expected Short fall | (1.50) | |||
| Skewness | 2.38 | |||
| Kurtosis | 13.31 |
| Risk Adjusted Performance | 0.1515 | |||
| Market Risk Adjusted Performance | 0.5114 | |||
| Mean Deviation | 1.29 | |||
| Semi Deviation | 1.16 | |||
| Downside Deviation | 1.45 | |||
| Coefficient Of Variation | 518.37 | |||
| Standard Deviation | 1.94 | |||
| Variance | 3.78 | |||
| Information Ratio | 0.1439 | |||
| Jensen Alpha | 0.303 | |||
| Total Risk Alpha | 0.1447 | |||
| Sortino Ratio | 0.1933 | |||
| Treynor Ratio | 0.5014 | |||
| Maximum Drawdown | 13.04 | |||
| Value At Risk | (2.33) | |||
| Potential Upside | 2.8 | |||
| Downside Variance | 2.1 | |||
| Semi Variance | 1.33 | |||
| Expected Short fall | (1.50) | |||
| Skewness | 2.38 | |||
| Kurtosis | 13.31 |
Consider Netflix's intraday indicators
Netflix intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of Netflix stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.
Netflix Corporate Filings
F4 | 20th of November 2024 The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities | ViewVerify |
10Q | 18th of October 2024 Quarterly performance report mandated by Securities and Exchange Commission (SEC), to be filed by publicly traded corporations | ViewVerify |
8K | 17th of October 2024 Report filed with the SEC to announce major events that shareholders should know about | ViewVerify |
Netflix Stock media impact
Far too much social signal, news, headlines, and media speculation about Netflix that are available to investors today. That information is available publicly through Netflix media outlets and privately through word of mouth or via Netflix internal channels. However, regardless of the origin, that massive amount of Netflix data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of Netflix news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of Netflix relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to Netflix's headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive Netflix alpha.
Netflix Historical Investor Sentiment
Investor biases related to Netflix's public news can be used to forecast risks associated with an investment in Netflix. The trend in average sentiment can be used to explain how an investor holding Netflix can time the market purely based on public headlines and social activities around Netflix. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Netflix's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Netflix and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average Netflix news discussions. The higher the estimate score, the more favorable the investor's outlook on Netflix.
Netflix Corporate Management
| Spencer Neumann | Chief Officer | Profile | |
| Theodore Sarandos | Chief Content Officer | Profile | |
| Wilmot Hastings | Chairman, CoFounder | Profile | |
| Rachel Whetstone | Chief Communications Officer | Profile | |
| David Hyman | General Counsel and Secretary | Profile | |
| Jeffrey Karbowski | Chief Officer | Profile | |
| Elizabeth Stone | Chief Officer | Profile |
Additional Tools for Netflix Stock Analysis
When running Netflix's price analysis, check to measure Netflix's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Netflix is operating at the current time. Most of Netflix's value examination focuses on studying past and present price action to predict the probability of Netflix's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Netflix's price. Additionally, you may evaluate how the addition of Netflix to your portfolios can decrease your overall portfolio volatility.