GURUFOCUS.COM » STOCK LIST » USA » NAS » Netflix Inc (NAS:NFLX) » Definitions » ROE %
Switch to:

Netflix ROE %

: 31.48% (As of Jun. 2022)
View and export this data going back to 2002. Start your Free Trial

ROE % is calculated as Net Income attributable to Common Stockholders (Net Income minus dividends to participating security holders) divided by its average Total Stockholders Equity over a certain period of time. Netflix's annualized net income attributable to common stockholders for the quarter that ended in Jun. 2022 was $5,764 Mil. Netflix's average Total Stockholders Equity over the quarter that ended in Jun. 2022 was $18,310 Mil. Therefore, Netflix's annualized ROE % for the quarter that ended in Jun. 2022 was 31.48%.

The historical rank and industry rank for Netflix's ROE % or its related term are showing as below:

NFLX' s ROE % Range Over the Past 10 Years
Min: 2.47   Med: 17.29   Max: 38.02
Current: 31.2

During the past 13 years, Netflix's highest ROE % was 38.02%. The lowest was 2.47%. And the median was 17.29%.

NFLX's ROE % is ranked better than
92.04% of 930 companies
in the Media - Diversified industry
Industry Median: 4.41 vs NFLX: 31.20

Netflix ROE % Historical Data

The historical data trend for Netflix's ROE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Netflix Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROE %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 17.85 27.46 29.12 29.62 38.02

Netflix Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 40.47 39.73 15.59 38.27 31.48

Competitive Comparison

For the Entertainment subindustry, Netflix's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Netflix ROE % Distribution

For the Media - Diversified industry and Communication Services sector, Netflix's ROE % distribution charts can be found below:

* The bar in red indicates where Netflix's ROE % falls into.



Netflix ROE % Calculation

Netflix's annualized ROE % for the fiscal year that ended in Dec. 2021 is calculated as

ROE %=Net Income attributable to Common Stockholders (A: Dec. 2021 )/( (Total Stockholders Equity (A: Dec. 2020 )+Total Stockholders Equity (A: Dec. 2021 ))/ count )
=5116.228/( (11065.24+15849.248)/ 2 )
=5116.228/13457.244
=38.02 %

Netflix's annualized ROE % for the quarter that ended in Jun. 2022 is calculated as

ROE %=Net Income attributable to Common Stockholders (Q: Jun. 2022 )/( (Total Stockholders Equity (Q: Mar. 2022 )+Total Stockholders Equity (Q: Jun. 2022 ))/ count )
=5763.804/( (17544.039+19075.974)/ 2 )
=5763.804/18310.0065
=31.48 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROE %, the net income attributable to common stockholders of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Jun. 2022) net income attributable to common stockholders data. ROE % is displayed in the 30-year financial page.


Netflix  (NAS:NFLX) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %**(Q: Jun. 2022 )
=Net Income/Total Stockholders Equity
=5763.804/18310.0065
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(5763.804 / 31880.564)*(31880.564 / 45840.9195)*(45840.9195 / 18310.0065)
=Net Margin %*Asset Turnover*Equity Multiplier
=18.08 %*0.6955*2.5036
=ROA %*Equity Multiplier
=12.57 %*2.5036
=31.48 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %**(Q: Jun. 2022 )
=Net Income/Total Stockholders Equity
=5763.804/18310.0065
=(Net Income /Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Stockholders Equity)
= (5763.804 / 6492.216) * (6492.216 / 6313.132) * (6313.132 / 31880.564) * (31880.564 / 45840.9195) * (45840.9195 / 18310.0065)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.8878 * 1.0284 * 19.8 % * 0.6955 * 2.5036
=31.48 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Jun. 2022) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Jun. 2022) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** The ROE % used above is for Du Pont Analysis only. It is different from the defined ROE % page on our website, as here it uses Net Income instead of Net Income attributable to Common Stockholders in the calculation.


Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Netflix ROE % Related Terms

Thank you for viewing the detailed overview of Netflix's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.


Netflix Business Description

Netflix logo
Address
100 Winchester Circle, Los Gatos, CA, USA, 95032
Netflix's primary business is a streaming video on demand service now available in almost every country worldwide except China. Netflix delivers original and third-party digital video content to PCs, Internet-connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. In 2011, Netflix introduced DVD-only plans and separated the combined streaming and DVD plans, making it necessary for subscribers who want both to have separate plans.
Executives
Lee Dicus Marian officer: Chief Marketing Officer 526 WEST 111TH STREET APARTMENT 3C NEW YORK NY 10025
Hoag Jay C director 250 MIDDLEFIELD ROAD MENLO PARK CA 94025
Ezama Meabe Sergio officer: Chief Talent Officer 59 HILLSIDE ROAD GREENWICH CT 06830
Masiyiwa Strive director 265 FRANKLIN STREET BOSTON MA 02110
Saint John Bozoma officer: Chief Marketing Officer 9255 SUNSET BLVD 2ND FLOOR LOS ANGELES CA 90069
Neumann Spencer Adam officer: Chief Financial Officer SIERRA INCOME CORPORATION 375 PARK AVE., SUITE 3304 NEW YORK NY 10152
Whetstone Rachel officer: Chief Communications Officer 185 TUSCALOOSA AVENUE ATHERTON CA 94027
Dopfner Mathias director C/O TIME WARNER INC. ONE TIME WARNER CENTER NEW YORK NY 10019
Rice Susan E director 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Belmer Rodolphe director 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Neal Jessica officer: Chief Talent Officer 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Friedland Jonathan officer: Chief Communications Officer C/O NETFLIX, INC., 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Wells David B officer: CFO C/O NETFLIX, INC. 100 WINCHESTER CIRCLE LOS GATOS CA 95130
Bennett Kelly officer: Chief Marketing Officer 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Sweeney Anne M director C/O 100 WINCHESTER CIRCLE LOS GATOS CA 95032

Netflix Headlines

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)