Netflix Beneish M Score

NFLX
 Stock
  

USD 241.15  4.54  1.85%   

This module uses fundamental data of Netflix to approximate the value of its Beneish M Score. Netflix M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Additionally, see Netflix Piotroski F Score and Netflix Altman Z Score analysis.
  
Netflix Total Debt is fairly stable at the moment as compared to the past year. Netflix reported Total Debt of 18.76 Billion in 2021. Debt Non Current is likely to rise to about 19.6 B in 2022, whereas Debt Current is likely to drop slightly above 447.3 M in 2022. Netflix Total Assets Per Share are fairly stable at the moment as compared to the past year. Netflix reported Total Assets Per Share of 100.42 in 2021. Asset Turnover is likely to rise to 0.95 in 2022, whereas Accounts Payable Turnover is likely to drop 33.06 in 2022.
At this time, it appears that Netflix is an unlikely manipulator. The earnings manipulation may begin if Netflix's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Netflix executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Netflix's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.76
Beneish M Score - Unlikely Manipulator
Elasticity of ReceivablesN/AFocus
Asset Quality1.06Focus
Expense Coverage1.0Focus
Gross Margin Strengs0.88Focus
Accruals Factor1.0Focus
Depreciation Resistance1.0Focus
Net Sales Growth1.08Focus
Financial Leverage Condition1.0Focus

Netflix Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Netflix's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues32 B29.7 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative Expense4.1 B3.8 B
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations423.6 M392.6 M
Significantly Up
Decreasing
Very volatile
Depreciation Amortization and Accretion13.6 B12.6 B
Significantly Up
Increasing
Slightly volatile
Total Assets48.1 B44.6 B
Significantly Up
Increasing
Slightly volatile
Investments389.5 M306.1 M
Significantly Up
Decreasing
Stable
Investments Current389.5 M306.1 M
Significantly Up
Decreasing
Stable
Property Plant and Equipment Net1.2 B1.1 B
Significantly Up
Increasing
Slightly volatile
Total Liabilities31 B28.7 B
Significantly Up
Increasing
Slightly volatile
Current Assets6.5 B8.1 B
Significantly Down
Increasing
Slightly volatile
Assets Non Current36.6 B33.9 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities9.2 B8.5 B
Significantly Up
Increasing
Slightly volatile
Liabilities Non Current25.3 B23.5 B
Significantly Up
Increasing
Slightly volatile
Total Debt20.2 B18.8 B
Significantly Up
Increasing
Slightly volatile
Debt Current447.3 M449.9 M
Slightly Down
Decreasing
Slightly volatile
Debt Non Current19.6 B18.2 B
Significantly Up
Increasing
Slightly volatile
Operating Income6.7 B6.2 B
Significantly Up
Increasing
Slightly volatile
Gross Margin36.5241.6366
Fairly Down
Increasing
Slightly volatile

Netflix Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Netflix's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Netflix in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Netflix's degree of accounting gimmicks and manipulations.

About Netflix Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

13.55 Billion

Netflix Depreciation Amortization and Accretion is fairly stable at the moment as compared to the past year. Netflix reported Depreciation Amortization and Accretion of 12.56 Billion in 2021

Netflix Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Netflix. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues11.69 B15.79 B20.16 B25 B29.7 B32.04 B
Total Assets19.01 B25.97 B33.98 B39.28 B44.58 B48.1 B
Current Assets7.67 B9.69 B6.18 B9.76 B8.07 B6.5 B
Assets Non Current11.34 B16.28 B27.8 B29.52 B33.95 B36.63 B
Total Liabilities15.43 B20.74 B26.39 B28.22 B28.74 B31 B
Current Liabilities5.47 B6.49 B6.86 B7.81 B8.49 B9.16 B
Total Debt6.5 B10.36 B14.76 B16.31 B18.76 B20.24 B
Debt Non Current6.5 B10.36 B14.76 B15.81 B18.18 B19.62 B
Operating Income838.68 M1.61 B2.6 B4.59 B6.19 B6.68 B
Gross Margin34.4936.8938.2838.8941.6436.52

Netflix ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Netflix's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Netflix's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Netflix Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Netflix's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Netflix using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Netflix based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. The company provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services in the United States. The company has approximately 222 million paid members in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.

Netflix Investors Sentiment

The influence of Netflix's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Netflix. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.
Investor biases related to Netflix's public news can be used to forecast risks associated with investment in Netflix. The trend in average sentiment can be used to explain how an investor holding Netflix can time the market purely based on public headlines and social activities around Netflix. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Netflix's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Netflix's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Netflix's news discussions. The higher the estimated score, the more favorable is the investor's outlook on Netflix.

Netflix Implied Volatility

    
  52.45  
Netflix's implied volatility exposes the market's sentiment of Netflix stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Netflix's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Netflix stock will not fluctuate a lot when Netflix's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Netflix in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Netflix's short interest history, or implied volatility extrapolated from Netflix options trading.

Becoming a Better Investor with Macroaxis

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Additionally, see Netflix Piotroski F Score and Netflix Altman Z Score analysis. Note that the Netflix information on this page should be used as a complementary analysis to other Netflix's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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When running Netflix price analysis, check to measure Netflix's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Netflix is operating at the current time. Most of Netflix's value examination focuses on studying past and present price action to predict the probability of Netflix's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Netflix's price. Additionally, you may evaluate how the addition of Netflix to your portfolios can decrease your overall portfolio volatility.
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Is Netflix's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Netflix. If investors know Netflix will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Netflix listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.077
Market Capitalization
110.8 B
Quarterly Revenue Growth YOY
0.086
Return On Assets
0.085
Return On Equity
0.31
The market value of Netflix is measured differently than its book value, which is the value of Netflix that is recorded on the company's balance sheet. Investors also form their own opinion of Netflix's value that differs from its market value or its book value, called intrinsic value, which is Netflix's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Netflix's market value can be influenced by many factors that don't directly affect Netflix's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Netflix's value and its price as these two are different measures arrived at by different means. Investors typically determine Netflix value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Netflix's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.