Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- NFLX's revenue growth trails the industry average of 22.9%. Since the same quarter one year prior, revenues rose by 10.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly decreased to $0.15 million or 99.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Internet & Catalog Retail industry and the overall market, NETFLIX INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Netflix, Inc. provides Internet subscription services for TV shows and movies in the United States and internationally. The company offers its subscribers to watch unlimited TV shows and movies streamed over the Internet to their TVs, computers, and mobile devices. Netflix has a market cap of $3.86 billion and is part of the services sector and specialty retail industry. The company has a P/E ratio of 38.2, above the S&P 500 P/E ratio of 17.7. Shares are up 0.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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