Netflix Inc (NFLX, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising growth trajectory. With its shares currently priced at $645.41, Netflix Inc has enjoyed a daily gain of 0.72% and an impressive three-month increase of 12.64%. A detailed analysis, supported by the GF Score, positions Netflix Inc as a prime candidate for significant future growth.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, evaluating stocks based on five key aspects of valuation. These aspects have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Netflix Inc boasts a GF Score of 94, signaling strong future performance potential.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 10/10
Understanding Netflix Inc's Business
Netflix Inc, with a market cap of $278.11 billion and annual sales of $34.93 billion, operates a streamlined business model focused on its streaming service. It is the largest provider of television entertainment globally, boasting nearly 250 million subscribers. The company has recently ventured into ad-supported subscription plans, diversifying its revenue streams beyond traditional subscription fees.
Financial Strength Breakdown
Netflix Inc's financial resilience is evident in its robust balance sheet and strategic debt management, with an Interest Coverage ratio of 10.53 and an Altman Z-Score of 8.03. These metrics not only reflect strong financial health but also align with the principles of legendary investor Benjamin Graham.
Profitability Rank Breakdown
Netflix Inc's profitability is outstanding, with significant improvements in its Operating Margin and Gross Margin over the past five years. These trends highlight the company's efficiency in converting revenue into profit, further supported by a high Predictability Rank of 4.5 stars.
Growth Rank Breakdown
Netflix Inc's commitment to growth is demonstrated by its impressive 3-Year Revenue Growth Rate of 10.9%, outperforming 68.15% of its industry peers. The company's EBITDA growth further underscores its potential for expansion and profitability.
Conclusion
Considering Netflix Inc's robust financial strength, exceptional profitability, and promising growth metrics, the GF Score highlights the company's unparalleled position for potential outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
