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 $671.8, Netflix Inc has enjoyed a daily gain of 1.29% and a notable three-month increase of 10.27%. 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 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 $288.31 billion and annual sales of $36.30 billion, operates a streamlined business model focused solely on its streaming service. It is the largest provider of television entertainment globally, with over 275 million subscribers. Netflix's recent foray into ad-supported subscription plans marks its entry into the advertising sector, complementing its substantial subscription revenue.
Financial Strength Breakdown
Netflix Inc's Financial Strength is evident in its robust balance sheet and strategic debt management, with a Debt-to-Revenue ratio of 0.39. The company's Interest Coverage ratio stands at 11.67, significantly above the benchmark of 5 set by investing legend Benjamin Graham. Additionally, an Altman Z-Score of 8.42 further underscores its financial stability.
Profitability and Growth Metrics
Netflix Inc's Profitability Rank is impressive, with a consistent increase in Operating Margin over the past five years, reaching 20.62% in 2023. Its Gross Margin also reflects growing efficiency, standing at 41.54% in 2023. The company's Growth Rank is equally strong, with a 3-Year Revenue Growth Rate of 10.9%, outperforming 63.79% of its industry peers.
Conclusion
Considering Netflix Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through 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.
