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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 6/10

vs
industry
vs
history
Cash to Debt 2.40
NFLX's Cash to Debt is ranked higher than
67% of the 1083 Companies
in the Global Specialty Retail industry.

( Industry Median: 2.50 vs. NFLX: 2.40 )
NFLX' s 10-Year Cash to Debt Range
Min: 1.35   Max: No Debt
Current: 2.4

Equity to Asset 0.25
NFLX's Equity to Asset is ranked lower than
56% of the 1073 Companies
in the Global Specialty Retail industry.

( Industry Median: 0.52 vs. NFLX: 0.25 )
NFLX' s 10-Year Equity to Asset Range
Min: -2.17   Max: 0.69
Current: 0.25

-2.17
0.69
Interest Coverage 7.84
NFLX's Interest Coverage is ranked higher than
53% of the 771 Companies
in the Global Specialty Retail industry.

( Industry Median: 34.17 vs. NFLX: 7.84 )
NFLX' s 10-Year Interest Coverage Range
Min: 2.5   Max: 9999.99
Current: 7.84

2.5
9999.99
F-Score: 5
Z-Score: 4.28
M-Score: -2.29
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 7/10

vs
industry
vs
history
Operating margin (%) 5.22
NFLX's Operating margin (%) is ranked higher than
72% of the 1067 Companies
in the Global Specialty Retail industry.

( Industry Median: 5.56 vs. NFLX: 5.22 )
NFLX' s 10-Year Operating margin (%) Range
Min: -162.89   Max: 13.12
Current: 5.22

-162.89
13.12
Net-margin (%) 2.57
NFLX's Net-margin (%) is ranked higher than
65% of the 1066 Companies
in the Global Specialty Retail industry.

( Industry Median: 3.93 vs. NFLX: 2.57 )
NFLX' s 10-Year Net-margin (%) Range
Min: -162.35   Max: 7.44
Current: 2.57

-162.35
7.44
ROE (%) 8.43
NFLX's ROE (%) is ranked higher than
70% of the 1049 Companies
in the Global Specialty Retail industry.

( Industry Median: 9.28 vs. NFLX: 8.43 )
NFLX' s 10-Year ROE (%) Range
Min: -23.44   Max: 58.18
Current: 8.43

-23.44
58.18
ROA (%) 2.08
NFLX's ROA (%) is ranked higher than
58% of the 1065 Companies
in the Global Specialty Retail industry.

( Industry Median: 4.71 vs. NFLX: 2.08 )
NFLX' s 10-Year ROA (%) Range
Min: -111.02   Max: 17.04
Current: 2.08

-111.02
17.04
ROC (Joel Greenblatt) (%) 170.91
NFLX's ROC (Joel Greenblatt) (%) is ranked higher than
98% of the 1066 Companies
in the Global Specialty Retail industry.

( Industry Median: 20.96 vs. NFLX: 170.91 )
NFLX' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -319.23   Max: 275.8
Current: 170.91

-319.23
275.8
Revenue Growth (%) 21.80
NFLX's Revenue Growth (%) is ranked higher than
94% of the 786 Companies
in the Global Specialty Retail industry.

( Industry Median: 6.50 vs. NFLX: 21.80 )
NFLX' s 10-Year Revenue Growth (%) Range
Min: -30.1   Max: 49.4
Current: 21.8

-30.1
49.4
EBITDA Growth (%) 51.60
NFLX's EBITDA Growth (%) is ranked higher than
97% of the 671 Companies
in the Global Specialty Retail industry.

( Industry Median: 9.40 vs. NFLX: 51.60 )
NFLX' s 10-Year EBITDA Growth (%) Range
Min: 34.5   Max: 56.2
Current: 51.6

34.5
56.2
EPS Growth (%) -14.50
NFLX's EPS Growth (%) is ranked higher than
54% of the 621 Companies
in the Global Specialty Retail industry.

( Industry Median: 11.60 vs. NFLX: -14.50 )
NFLX' s 10-Year EPS Growth (%) Range
Min: -47.3   Max: 92.2
Current: -14.5

-47.3
92.2
» NFLX's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2013

NFLX Guru Trades in Q1 2013

George Soros 65,000 sh (New)
Ken Fisher 1,460 sh (New)
Jim Simons 197,000 sh (New)
Tom Russo 52 sh (New)
Chase Coleman 655,000 sh (New)
Ray Dalio 15,600 sh (New)
John Griffin 1,000,000 sh (New)
Carl Icahn 5,541,066 sh (unchged)
Caxton Associates Sold Out
Carl Icahn Sold Out
Whitney Tilson 15,875 sh (-68.54%)
Steven Cohen 17,297 sh (-80.86%)
Chris Davis 530,666 sh (-86.52%)
» More
Q2 2013

NFLX Guru Trades in Q2 2013

Jeremy Grantham 21,256 sh (New)
Pioneer Investments 30,300 sh (New)
Steven Cohen 26,729 sh (+54.53%)
Steven Cohen 44,000 sh (unchged)
Carl Icahn 5,541,066 sh (unchged)
Ken Fisher Sold Out
Tom Russo Sold Out
Jim Simons Sold Out
Stanley Druckenmiller Sold Out
Ray Dalio Sold Out
Chris Davis 515,876 sh (-2.79%)
Whitney Tilson 12,665 sh (-20.22%)
George Soros 40,000 sh (-38.46%)
Chase Coleman 315,000 sh (-51.91%)
John Griffin 434,000 sh (-56.6%)
» More
Q3 2013

NFLX Guru Trades in Q3 2013

Ron Baron 15,500 sh (New)
Jim Simons 279,000 sh (New)
Chase Coleman 440,000 sh (+39.68%)
Jeremy Grantham 22,142 sh (+4.17%)
Carl Icahn 5,541,066 sh (unchged)
Chris Davis 512,826 sh (-0.59%)
Pioneer Investments 25,352 sh (-16.33%)
John Griffin 349,000 sh (-19.59%)
Whitney Tilson 6,748 sh (-46.72%)
Steven Cohen 6,734 sh (-74.81%)
George Soros 10,000 sh (-75%)
» More
Q4 2013

NFLX Guru Trades in Q4 2013

Steven Cohen 153,510 sh (+2179.63%)
George Soros 28,000 sh (+180%)
Chase Coleman 663,000 sh (+50.68%)
Ron Baron 17,000 sh (+9.68%)
John Griffin Sold Out
Chris Davis 505,871 sh (-1.36%)
Whitney Tilson 6,535 sh (-3.16%)
Jeremy Grantham 19,248 sh (-13.07%)
Jim Simons 208,700 sh (-25.2%)
Pioneer Investments 12,690 sh (-49.94%)
Carl Icahn 2,665,557 sh (-51.89%)
» More
» Details

Insider Trades

Latest Guru Trades with NFLX

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Carl Icahn 2013-12-31 Reduce -51.89%3.63%$288.43 - $380.58 $ 372.99%2665557
John Griffin 2013-12-31 Sold Out 1.3%$288.43 - $380.58 $ 372.99%0
George Soros 2013-12-31 Add 180%0.06%$288.43 - $380.58 $ 372.99%28000
John Griffin 2013-09-30 Reduce -19.59%0.22%$220.91 - $313.83 $ 372.938%349000
George Soros 2013-09-30 Reduce -75%0.07%$220.91 - $313.83 $ 372.938%10000
Ron Baron 2013-09-30 New Buy0.02%$220.91 - $313.83 $ 372.938%15500
John Griffin 2013-06-30 Reduce -56.6%1.36%$163.06 - $243.4 $ 372.979%434000
George Soros 2013-06-30 Reduce -38.46%0.05%$163.06 - $243.4 $ 372.979%40000
Ray Dalio 2013-06-30 Sold Out 0.03%$163.06 - $243.4 $ 372.979%0
John Griffin 2013-03-31 New Buy2.4%$92.01 - $196.45 $ 372.9134%1000000
George Soros 2013-03-31 New Buy0.14%$92.01 - $196.45 $ 372.9134%65000
Ray Dalio 2013-03-31 New Buy0.03%$92.01 - $196.45 $ 372.9134%15600
Premium More recent guru trades are included for Premium Members only!!
» Interactive Charts

Peter Lynch Chart ( What is Peter Lynch Charts )

Guru Investment Theses on Netflix Inc

Baron Funds Comments on Netflix Inc. - Aug 24, 2012

From Baron Funds' second quarter commentary:

Netflix, Inc. (NFLX) operates the leading streaming video subscription service, offering movies and TV shows to 24 million domestic subscribers for $8 per month. Netflix continues to rapidly grow its subscriber base, as it offers the widest selection of TV and movie programming on the largest array of televisions and other devices among all streaming providers. This scale advantage allows Netflix to invest more for its programming, which then appeals to a larger subscriber base, allowing it to invest more for its programming creating a virtuous cycle. Netflix's business model is similar to that of HBO and other premium pay TV networks and, at scale, Netflix's profit potential would be considerable. Netflix is rapidly approaching HBO's scale in the U.S., and has a similarly large opportunity, in our view, outside of the U.S., a business that Netflix is just beginning to develop. Following a rare management misstep last year, Netflix shares have been volatile, having fallen as much as 80% from their highs. We have established a position to take advantage of this meaningful correction in the shares, as we believe the opportunity for Netflix remains intact. (Rich Rosenstein)
Check out Ron Baron latest stock trades

Top Ranked Articles about Netflix Inc

Weekly 52-Week Highs Highlight: PCLN, NFLX, CERN, HPQ
According to GuruFocus list of 52-week highs; Priceline.com Inc, Netflix Inc, Cerner Corporation, and Hewlett-Packard Co have all reached their 52-week highs. Read more...
Carl Icahn’s Top Held Stocks
Carl Icahn had a busy third quarter, highlighted by losing his battle to Michael Dell and fighting for more share buybacks with Apple. The guru made notable moves by selling out of his positions in WebMD, Hain Celestial and Dell and buying in to Apple and Talisman Energy over the past quarter. Read more...
What the Gurus Sold this Week
The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios. “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they own a greater-than 5% stake, SEC regulations require them to report their transaction within two days. Read more...
Icahn Cashes out Big with Netflix Sell
The billionaire, activist investor Carl Icahn sold off a huge chunk of his stake in Netflix (NFLX) today as the company released positive third quarter earnings yesterday. The guru made a sell of half of his stake in the online media company.

And of course our always-vocal Carl Icahn had to take to Twitter to brag about his most recent transaction. In a tweet released yesterday Icahn said: Icahn disclosed that he had taken a 10% stake in the company in Nov. 2012 when the company was trading at about $60 per share. Since last year, the stock is up over 400% and is trading at around $327 per share.

According to the GuruFocus Real Time Picks, Icahn cut his holdings -51.89% by selling a total of 2,875,509 shares at an average price of $354.99 per share. Since the announcement of his sell, shares are trading down around 9%. With this sell Icahn raked in about $800 million.

Netflix’s historical pricing:



Despite the size of his sell, Icahn still holds on to 2,665,557 shares, maintaining a 4.5% stake in the company.

Yesterday, the company released its third quarter financials which beat expectations based on its increasing content and original programming. Over the past year the company has released several original series which have done exceedingly better than expected and even earned some Emmy nods, these original series helped increase subscriber numbers.

Icahn said regarding his sell:

As a hardened veteran of seven bear markets I have learned that when you are lucky and/or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table. I want to thank Reed Hastings, Ted Sarandos and the rest of the Netflix team for a job well done. And last but not least, I wish to thank Kevin Spacey.

About Netflix

Netflix is the world’s leading internet television network with over 40 million members in 41 countries, watching over a billion hours of TV shows and movies every month. The company charges its customers a monthly price and then the users can watch as much as they want, whenever they want.

Netflix’s historical revenue and net income:



The GuruFocus Analysis on Netflix reports:

· Its revenue has slowed down over the past year.
· Its price is sitting around its 10-year high.
· Its P/S ratio is near a 2-year high.
· The company’s asset growth is faster than its revenue growth.

Netflix also announced that it had purchased several new television series to place as a “Netflix Original.”

Netflix’s Possible Troubles

Currently investors are trying to figure out where Netflix is on the continuum between spending and making money. The company is required to spend money on content to continue its subscriber growth, but at the same time the cost of this, both original and licensed, content is tampering with its profit growth.

The company’s third quarter financials report this problem. The company brought in revenue of $1.1 billion, but the net income totaled only $31.8 million, or $0.52 per share, demonstrating a net profit margin of only 2.9%.

To see the entire Netflix third quarter interview, read here.

Those like Macquarie Securities analyst Tim Nollen who analyze Netflix express their confusion in valuing the company because the “upside could yet be substantial if Netflix continues to drive sub growth, but on the flip side Netflix continues to make big bets on original programming and international expansion. The P&L is highly sensitive and the stock momentum-driven, so any stumbles could send NFLX back downhill.”

This year, already, Netflix has committed to spending $5.4 billion on content, and $2.5 billion of that will have to be paid within the next year.

By spending such an immense amount of money on its content, the company is left with little to actually operate the company which is where investors are becoming worried about the sustainability of the company. Last year Netflix posted revenue of $3.6 billion, but the operating income for the company was only around $50 million.

Netflix CEO Reed Hastings’ plan to increase the financial growth of the company is to expand its international recognition. Over the past quarter, Netflix gained an additional 1.4 million international subscribers, bringing their international total to 9.2 million. Hasting reported that the company would expand overseas and that the company expects that international subscribers will ultimately account for as much as 80% of Netflix’s future revenue.

Netflix has a market cap of $19.31 billion. Its shares are currently trading at around $327.63 with a P/E ratio of 407.40, a P/S ratio of 5.00 and a P/B ratio of 17.40. The company had an annual average earnings growth of 42.10% over the past ten years.

GuruFocus rated Netflix the business predictability rank of 5-star. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 201.60
NFLX's P/E(ttm) is ranked lower than
74% of the 887 Companies
in the Global Specialty Retail industry.

( Industry Median: 17.80 vs. NFLX: 201.60 )
NFLX' s 10-Year P/E(ttm) Range
Min: 14.52   Max: 2387.86
Current: 201.6

14.52
2387.86
P/B 16.50
NFLX's P/B is ranked lower than
79% of the 1036 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.71 vs. NFLX: 16.50 )
NFLX' s 10-Year P/B Range
Min: 2.51   Max: 52.29
Current: 16.5

2.51
52.29
P/S 5.20
NFLX's P/S is ranked lower than
86% of the 1107 Companies
in the Global Specialty Retail industry.

( Industry Median: 0.74 vs. NFLX: 5.20 )
NFLX' s 10-Year P/S Range
Min: 0.87   Max: 8.42
Current: 5.2

0.87
8.42
EV-to-EBIT 100.00
NFLX's EV-to-EBIT is ranked lower than
78% of the 968 Companies
in the Global Specialty Retail industry.

( Industry Median: 13.34 vs. NFLX: 100.00 )
NFLX' s 10-Year EV-to-EBIT Range
Min: 8.4   Max: 3077.6
Current: 100

8.4
3077.6
PEG 3.70
NFLX's PEG is ranked lower than
58% of the 521 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.29 vs. NFLX: 3.70 )
NFLX' s 10-Year PEG Range
Min: 0.35   Max: 13.17
Current: 3.7

0.35
13.17
Shiller P/E 168.50
NFLX's Shiller P/E is ranked lower than
77% of the 541 Companies
in the Global Specialty Retail industry.

( Industry Median: 20.92 vs. NFLX: 168.50 )
NFLX' s 10-Year Shiller P/E Range
Min: 26.04   Max: 315.8
Current: 168.5

26.04
315.8

Valuation & Return

vs
industry
vs
history
Price/DCF (Projected) 8.90
NFLX's Price/DCF (Projected) is ranked lower than
74% of the 551 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.20 vs. NFLX: 8.90 )
NFLX' s 10-Year Price/DCF (Projected) Range
Min: 1.01   Max: 8.76
Current: 8.9

1.01
8.76
Price/Median PS Value 2.50
NFLX's Price/Median PS Value is ranked lower than
75% of the 1015 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.00 vs. NFLX: 2.50 )
NFLX' s 10-Year Price/Median PS Value Range
Min: 0.24   Max: 2.83
Current: 2.5

0.24
2.83
Price/Peter Lynch Fair Value 8.10
NFLX's Price/Peter Lynch Fair Value is ranked lower than
75% of the 319 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.10 vs. NFLX: 8.10 )
NFLX' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.66   Max: 13.23
Current: 8.1

0.66
13.23
Earnings Yield (Greenblatt) 1.00
NFLX's Earnings Yield (Greenblatt) is ranked lower than
71% of the 983 Companies
in the Global Specialty Retail industry.

( Industry Median: 7.40 vs. NFLX: 1.00 )
NFLX' s 10-Year Earnings Yield (Greenblatt) Range
Min: 0.1   Max: 11.9
Current: 1

0.1
11.9
Forward Rate of Return (Yacktman) 54.27
NFLX's Forward Rate of Return (Yacktman) is ranked higher than
98% of the 727 Companies
in the Global Specialty Retail industry.

( Industry Median: 10.63 vs. NFLX: 54.27 )
NFLX' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 38.5   Max: 58.1
Current: 54.27

38.5
58.1

Business Description

Industry: Retail - Apparel & Specialty » Specialty Retail
Compare:TSCO, AMZN, EBAY, FIVE, AZO » details
Traded in other countries:NFC.Germany
Netflix, Inc., was incorporated in Delaware in August 1997 and completed its initial public offering in May 2002. The Company is the world's Internet television network with more than 33 million members in over 40 countries enjoying one billion hours of TV shows and movies per month. In the United States, subscribers can receive DVDs delivered quickly to their homes. The Company is organized into three operating segments, Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment provides its more than 27 million members with access to a broad range of exclusive, non-exclusive and original content delivered over the Internet to a host of connected devices - including PCs and Macs, game consoles such as PlayStations, smart TVs, Blu-ray players, home theater systems, Internet video players such as Apple TV and Roku, digital video recorders, and mobile devices. The large numbers of pay television and broadband households outside the U.S. provide its International streaming segment with a large long-term growth opportunity through significantly expanding its base of potential subscribers. Its Domestic DVD business launched in 1999 with DVD-by-mail subscription plans. The Company's main competitors include Multichannel video programming distributors with free TV Everywhere applications such as HBO GO or Showtime Anytime in the U.S. and SkyGo or BBC iPlayer in the U.K., and other on demand content from cable providers, such as Time Warner and Comcast; direct broadcast satellite providers, such as DIRECTV and Echostar; and telecommunication providers such as AT&T and Verizon; 'Over-the-top' Internet movie and TV content providers, such as, Amazon.com's Prime Video, Hulu.com and Hulu Plus, LOVEFiLM, Clarovideo, Viaplay, and Google's YouTube; Transactional content providers, such as Apple's iTunes, Amazon's Instant Video, GooglePlay, and Vudu; DVD rental outlets and kiosk services, such as Blockbuster and Redbox; Entertainment video retailers, such as Best Buy, Wal-Mart and Amazon.com.

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