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 $766.77, Netflix Inc has experienced a slight daily decrease of 0.69%, yet it boasts an impressive three-month growth of 18.34%. 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 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 92, signaling strong future performance potential.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- 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 $327.76 billion and annual sales of $37.59 billion, operates a streamlined business model focused on its streaming service. It is the largest provider of television entertainment globally, boasting over 280 million subscribers. Netflix has recently ventured into ad-supported subscription plans, diversifying its revenue streams beyond traditional subscription fees.
Financial Strength Breakdown
Netflix Inc's financial robustness is evident in its Interest Coverage ratio of 12.49, significantly above the benchmark of 5 preferred by investing legend Benjamin Graham. Additionally, its Altman Z-Score of 8.85 indicates a strong buffer against financial distress, and a Debt-to-Revenue ratio of 0.43 underscores prudent debt management.
Profitability and Growth Metrics
Netflix Inc's profitability is highlighted by its impressive Operating Margin, which has consistently improved 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%. These metrics, combined with a Predictability Rank of 4.5 stars, affirm Netflix Inc's stable operational performance.
Conclusion
Considering Netflix Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies 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.
