Netflix Inc (NFLX, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising growth prospects. With its shares currently priced at $646.75, Netflix Inc has enjoyed a daily gain of 1.74% and an impressive three-month change of 10.83%. 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, assessing stocks based on five key valuation aspects. These aspects have been proven to correlate strongly 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 93, 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 Model
Netflix Inc, with a market cap of $278.69 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 and Stability
Netflix Inc's financial strength is evident in its robust balance sheet and impressive Interest Coverage ratio of 10.53, indicating a strong ability to meet interest obligations. The Altman Z-Score of 8.08 further underscores its financial stability, while a Debt-to-Revenue ratio of 0.4 highlights prudent debt management.
Profitability and Growth Metrics
Netflix Inc's Profitability Rank is exceptional, supported by a consistent increase in Operating Margin over the past five years, reaching 20.62% in 2023. The company's Gross Margin also reflects increasing efficiency, with a current figure of 41.54%. The Piotroski F-Score and a Predictability Rank of 4.5 stars further validate its solid financial health.
Expansion and Revenue Growth
Netflix Inc's commitment to growth is evident in its Growth Rank of 10/10. The company's 3-Year Revenue Growth Rate of 10.9% outperforms 67.74% of its industry peers. This is complemented by a strong increase in EBITDA, highlighting its capability to expand profitably.
Conclusion
Considering Netflix Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score effectively highlights the company's strong position for potential market 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.
