Netflix Inc is a streaming company and a service provider based in America and trades on the NasdaqGS platform under the Ticker NFLX. As a strong content provider, entrepreneur and an Internet video service company Netflix has grown to dominate the entertainment market across the globe. It is on investors’ radar also because of its growth profile, high multiple and performance in the technology industry.
At the close of the market, Netflix closes the day at $780.21 up by 2.13 % from the day before it closed. In the evening it edged up to $780.75 in after-hours trading, an increase of 0.07% further. Market capitalization of Netflix as of now stands at roughly $ 333.51 billion meaning that investors believe Netflix is in the right market segment and holds the capacity to grow into it. Specifically, using the idea of value, the analysts have given the stock a 1-year target estimate of $764.34, which has already been hit.
On other news, Netflix is at the center of probes by France and the Netherlands over alleged tax evasion and failure to declare workers. French prosecutors conducted a search in Netflix in Paris last week and in Amsterdam earlier this week, as part of an investigation opened in 2022 focusing on the company’s tax returns between 2019 and 2021.
The case is about an investigation of the company known as Netflix which uses a Dutch subsidiary to control revenue generated from French subscribers with an aim of avoiding taxes on them.
In response, the company has said it adheres to tax rules of countries where it invests, and has been engaging with investigators throughout the process. Since Netflix restructured its French operations in early 2021, it breaks down its revenue from French subscribers within France, in line with its tax payments to France, which stood at approximately €1.3bn in the last year. While the case remains under investigation, there are no charges yet filed.
Netflix current valuation ratios speak for future revenue growth and the company's stability among technology markets. Market capitalization of the company as of November 6th 2024 is around $333 billion, while the enterprise value is $340.09 billion.
Netflix has a trailing P/E ratio of 44.08 and forward P/E ratio of 32.57 which shows that the market expects Netflix to grow its earnings in the future. Another multiple, the PEG ratio of 1.59 also suggests that the expected future growth of the company is reasonable to its current stock price.
Netflix’s Price-to-Sales ratio of 9.15 and Price-to-Book ratio of 14.67 suggest that the market values Netflix’s revenue generation capabilities and assets highly. Additionally its Enterprise Value/Revenue and Enterprise Value/EBITDA ratios at 9.05 and 13.63, underscore its profitability and operational efficiency.
Netflix financial highlights reveal a profitable and efficient operation. With a profit margin of 20.7% and return on assets of 11.84%, Netflix demonstrates effective cost management and asset utilization. Its return on equity, an impressive 34.71%, suggests strong returns for shareholders.
The company’s revenue over the trailing twelve months (TTM) is $37.59 billion, yielding a net income of $7.78 billion and diluted EPS of 18.09.
On the balance sheet, Netflix holds $9.22 billion in cash with a debt-to-equity ratio of 81.46% reflecting moderate leverage. Netflix’s levered free cash flow of $21.65 billion highlights its solid cash generation capabilities, supporting growth initiatives and operational resilience.
Netflix has proven to be relatively performant when compared to the S&P 500 in all the time horizons as of November 6th 2024.
Year-to-Date (YTD) Return: NFLX appreciation +60.25% as compared to S&P 500 index +24.30%.
1-Year Return: NFLX 80.45% compared to 36.04% S&P 500
3-Year Return: NFLX +20.83% vs S&P 500 +26.22%
5-Year Return: NFLX +170.88% vs +92.84% of S&P 500
Using the performance data below, one would note that Netflix has had impressive growth rates in the recent past with much better YTD and 1-year returns than the broader market index.
Netflix has consistently outperformed earnings expectations throughout 2024, surpassing analyst estimates in each quarter.
Currently, there is an actual EPS of $5.40 vs estimate of $5.12
Q1 2024: Beating by $0.76.
Q2 2024: Actual EPS beat by $0.14.
Q3 2024: Beat by $0.28.
Q4 2024: Earnings are expected to be reported around January 21st 2025.
These earnings also imply that Netflix delivers high financial results and has the potential to surpass market expectations in some more quarters.
Netflix’s stock is displaying a very bullish trend after reaching its all-time high. This was after breaking through a key resistance zone around the $700 mark on the weekly chart. This breakout has set the stage for further uptrend, with the stock now approaching the $800 psychological level.
If a retracement occurs before Netflix pushes higher, it may retrace to the $700 support level. This could offer a favorable entry point for potential buyers. Its current trend suggests strong bullish sentiment and the potential to surpass $800 as it continues its uptrend.
| Year | Minimum Price Target | Maximum Price Target |
| 2023 | $600 | $750 |
| 2024 | $700 | $850 |
| 2025 | $750 | $900 |
| 2026 | $800 | $950 |
| 2027 | $850 | $1,000 |
| 2028 | $900 | $1,050 |
| 2029 | $950 | $1,100 |
| 2030 | $1,000 | $1,200 |
Currently, the Netflix company has demonstrated its sound financial performance, strong technical dynamics and even new global market initiatives. The stock has posted good revenues, always beating expectations and crossing key technical levels to suit the investors.
While one may find knockdown buying opportunities on pullbacks, and with a bright outlook long term, Netflix remains an attractive investment idea for players interested in the media and technology space. Nevertheless, when dealing with any type of stock, one should follow market conditions and company’s further steps to use the next further opportunities effectively.