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Netflix Inc
NFLX : NASDAQ : Services
$113.33 | %
Today's Range: 112.44 - 115.83
Avg. Daily Volume: 22,202,800
10/09/15 - 4:00 PM ET

Financial Analysis

NETFLIX INC's gross profit margin for the second quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. NETFLIX INC has weak liquidity. Currently, the Quick Ratio is 0.87 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 26.23% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY15 Q2 FY14
Net Sales ($mil)1644.691340.41
EBITDA ($mil)933.83798.54
EBIT ($mil)74.84129.6
Net Income ($mil)26.3471.02

Balance Sheet Q2 FY15 Q2 FY14
Cash & Equiv. ($mil)2796.761714.37
Total Assets ($mil)9654.866325.82
Total Debt ($mil)2400.0900.0
Equity ($mil)2032.081609.71

Profitability Q2 FY15 Q2 FY14
Gross Profit Margin84.0281.65
EBITDA Margin56.7759.57
Operating Margin4.559.67
Sales Turnover0.630.77
Return on Assets1.993.23
Return on Equity9.4812.69
Debt Q2 FY15 Q2 FY14
Current Ratio1.741.57
Interest Expense35.2213.33
Interest Coverage2.139.72

Share Data Q2 FY15 Q2 FY14
Shares outstanding (mil)426.01420.64
Div / share0.00.0
Book value / share4.773.83
Institutional Own % n/a n/a
Avg Daily Volume1.9721744E72841944.0


HOLD. NETFLIX INC's P/E ratio indicates a significant premium compared to an average of 80.02 for the Internet & Catalog Retail industry and a significant premium compared to the S&P 500 average of 19.38. For additional comparison, its price-to-book ratio of 22.22 indicates a significant premium versus the S&P 500 average of 2.58 and a significant premium versus the industry average of 15.33. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, NETFLIX INC proves to trade at a premium to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
NFLX 238.53 Peers 80.02   NFLX NM Peers 24.31

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

NFLX is trading at a significant premium to its peers.


Neutral. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

NFLX's P/CF is negative making the measure meaningless.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
NFLX 326.09 Peers 239.15   NFLX NM Peers 0.98

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

NFLX is trading at a significant premium to its peers.


Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

NFLX's negative PEG ratio makes this valuation measure meaningless.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NFLX 22.22 Peers 15.33   NFLX -6.35 Peers -112.82

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

NFLX is trading at a significant premium to its peers.


Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

NFLX is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
NFLX 7.39 Peers 3.68   NFLX 24.94 Peers 32.21

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

NFLX is trading at a significant premium to its industry.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

NFLX trails its peers on the basis of sales growth



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