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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Netflix, Inc. (XNAS:NFLX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NFLX
Name:
NETFLIX, INC. (XNAS:NFLX)
Sector:
801.68M
Industry:
Entertainment
CEO:
Mr. Reed Hastings
Total Employees:
11,300
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 37.23% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NETFLIX, INC.(NFLX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ENTERTAINMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
226.11
One Month Price Target:
$227.8
Six Month Price Target :
$236.25
Likely Price in One Year's Time:
Ticker:
$246.39
Likely Trading Range Today Under (Normal Volatility)
$224.92
Price Upper limit ($) :
$227.36
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$211.39
This week:
$193.19
This month :
$160.26
Other Primary facts
Market Cap:
97.12B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
444.71M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.85%
-35.12%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$294.47
$263.33
$157.75
$188.89
Medium risk (<10%) entry points
Buy Call
Sell Call
$253.20
Buy Put:
Sell Put:
$246.55
$198.94
$205.67
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NFLX
Sharpe Ratio:
0.13%
Comparison:
NFLX, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -59.72% lower than the industry
& is -94.36% lower than the market/S&P 500 average
Average Returns/Yield of
NFLX
Daily returns:
0.01%
Weekly returns:
0.06%
Monthly returns:
0.26%
Yearly returns:
6.78%
Comparison of returns:
Average annual returns/yield (last 3 years) is -54.23% below industry average
Classification:
NFLX, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.79
Statistical test of Returns:
NFLX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.18%
Weekly Volatility:
7.10%
Monthly Volatility:
14.21%
Yearly Volatility:
49.22%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.31%
Volatility in last five trading days has been -27.40% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.51%
Weekly VaR:
-14.56%
Monthly VaR:
-29.12%
How Much Can the price of
NFLX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$168.21
This translates to price declining to:
$33.92
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
NFLX is a 105.53% riskier investment compared to the market/S&P 500 & is 76.08% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.00% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NFLX
Beta in relation to market/S&P 500--1.33
Expected beta in 1 year's time:
0.823
Expected beta in 3 year's time:
1.164
Unlevered (debt free) Beta:
0.777
Beta in relation to Nasdaq (XNAS):
1.024
Beta in relation to all global stocks::
0.471
Beta Comparison & Analysis
Beta of competitors/peers::
0.556
Beta is 139.98% higher than peers
Average Industry Beta:
1.34
Beta is -0.39% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
35.34%
Sustainable growth rate is -0.78% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.092
Alpha is 65.64% above industry average alpha yield
Alpha is -585% below the market average
Analysis of Cost of Capital of
NFLX
Equity cost of capital:
0.123
Equity cost of capital is -0.29% below industry mean WACC
Unlevered (without debt) cost of capital:
7.16%
Before-tax cost of debt:
5.65%
After-tax cost of debt:
4.46%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.46%
WACC is 12.85% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$68.37
Revenue growth rate per share of (3Y):
5.73
Annual revenue growth rate is 234.29% above the industry average
EPS:
$11.02
Expected Annual growth rate of EPS (3Y):
35.85%
Expected future EPS growth rate is 13.35% higher than the Entertainment industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$32.68
EBITDA per share
$43.92
Valuation Analysis Today of
NFLX
P/E Ratio:
21.16
P/E Ratio of Competitors/Peers:
32.27
P/E ratio is -34.44% lower than main peers & is -21.73% lower than the industry
Stock price/value with industry average P/E ratio: $297.89
NFLX is -24.10% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.31
Price to sales ratio is 24.95% above the industry mean
P/B (Price to book value ratio):
5.73
-
-
Net income growth rate (3Y):
315.33%
Net income growth rate is -253.05% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
82.85%
Net debt to equity ratio:
48.60%
Debt to assets ratio:
32.06%
Net debt to assets ratio:
18.81%
Debt-to-asset ratio is -54.96% below industry average
Ability to repay debt:
Interest coverage ratio:
23.78
Interest coverage ratio is -68.03% less than industry average
Looking forward:
Debt growth rate:
-5.62%
Annual debt growth is -101% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.59%
Analysis of Key Statistics
Correlation of price movement with the market:
0.468
Statistical significance of correlation:
NFLX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.508
Stock price is -7.98% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.508
Correlation of price movement with Nasdaq (^IXIC):
-0.062
Covariance of price movement with the market:
-0.115
Kurtosis
25.937
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-2.097
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
NFLX
Gross Profit Margin Ratio:
167%
Operating Profit Margin Ratio:
20.41%
Operating profit margin is 209.32% higher than the industry
Net Profit Margin Ratio:
167%
Effective Tax Rate:
13.45%
Effective tax rate is -13.28% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
28.54%
Return on equity (ROE) is -44.74% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.05%
Return on assets (ROA) is 155.13% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.05
Current ratio is -36.08% below industry average
Cash Conversion Cycle (days):
-7.8
Cash conversion cycle is -116.03% below industry average
The remaining useful life of property plant & equipment is: 9.6 years
Stock based compensation to net income ratio:
2.38%
In-depth Efficiency Analysis
Revenue generated per employee:
2.7M
Each employee generates 178% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.7M
Each employee generates 398% more EBITDA than industry average revenue per employee
Profit generated per employee:
443.1K
Each employee generates 286% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
70.9K
Each employee generates -202547% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.3M
Each employee generates -202547% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 24.28%
Growth rate in R&D investment/expenditure is 20067.34% higher than the industry
Competitors/Peer firms of
NFLX
COMCAST CORPORATION (XNAS:CMCSA)
T-MOBILE US, INC. (XNAS:TMUS)
CHARTER COMMUNICATIONS, INC. (XNAS:CHTR)
NETEASE, INC. (XNAS:NTES)
Baidu, Inc. (XNAS:BIDU)
ZOOM VIDEO COMMUNICATIONS, INC. (XNAS:ZM)
ACTIVISION BLIZZARD, INC. (XNAS:ATVI)
VODAFONE GROUP PUBLIC LIMITED COMPANY (XNAS:VOD)
ELECTRONIC ARTS INC. (XNAS:EA)
Current Analyst Ratings
Strong buy�46%
Buy�58%
Hold�58%
Sell�4%
Strong sell�4%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
30.40B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
17.75B
12.65B
2.41B
1.45B
4.04B
2.59B
-
6.45B
400.29M
821.28M
12.92B
19.53B
6.21B
5.01B
5.79B
778.33M
5.01B
Statement of Cash Flow
Date:
Period:
3.24B
Differed Income Tax :
- 68906.00K
Stock Based Compensation :
119.21M
Change in Working Capital :
25.29M
Accounts Receivables:
-
Other Working Capital:
- 151188.00K
Other Non-Cash Items:
- 3991166.00K
Net Cash Provided by Operating Activities:
922.84M
Investments in PP&E:
- 121158.00K
Net Acquisitions:
- 124521.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
6.01B
-
6.01B
824.65M
-
1.26B
8.10B
1.38B
-
31.19B
-
-
4.66B
37.23B
-
45.33B
617.20M
-
-
1.24B
5.88B
7.74B
14.53B
5.51B
20.05B
-
27.79B
4.16B
14.29B
- 74170.0K
-
March 31, 2022 at 6:00:00 AM
24.20B
17.54B
45.33B
-
14.53B
8.5B
-
-
- 245679.00K
- 700000.00K
13.68M
-
-
-
- 686322.00K
- 11448.00K
- 20610.00K
6.03B
6.06B
922.84M
- 121158.00K
801.68M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
NFLX
2023
2024
2025
2026
2027
$247.62
$385.72
$420.31
$458.02
$499.10