Netflix Operating Margin

NFLX
 Stock
  

USD 226.78  6.71  2.87%   

Netflix fundamentals help investors to digest information that contributes to Netflix's financial success or failures. It also enables traders to predict the movement of Netflix Stock. The fundamental analysis module provides a way to measure Netflix's intrinsic value by examining its available economic and financial indicators, including the cash flow records, the balance sheet account changes, the income statement patterns, and various microeconomic indicators and financial ratios related to Netflix stock.
This module does not cover all equities due to inconsistencies in global equity categorizations. Continue to Equity Screeners to view more equity screening tools.
  
Operating Margin is likely to rise to 22.50 in 2022.

Netflix Operating Margin Analysis

Netflix's Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Netflix Operating Margin

22.5

Operating Margin 
 = 
Operating Income 
Revenue 
X
100 
More About Operating Margin | All Equity Analysis

Current Netflix Operating Margin

    
  20.08 %  
Most of Netflix's fundamental indicators, such as Operating Margin, are part of a valuation analysis module that helps investors searching for stocks that are currently trading at higher or lower prices than their real value. If the real value is higher than the market price, Netflix is considered to be undervalued, and we provide a buy recommendation. Otherwise, we render a sell signal.

Netflix Operating Margin Driver Correlations

Understanding the fundamental principles of building solid financial models for Netflix is extremely important. It helps to project a fair market value of Ford stock properly, considering its historical fundamentals such as Operating Margin. Since Netflix's main accounts across its financial reports are all linked and dependent on each other, it is essential to analyze all possible correlations between related accounts. However, instead of reviewing all of Netflix's historical financial statements, investors can examine the correlated drivers to determine its overall health. This can be effectively done using a conventional correlation matrix of Netflix's interrelated accounts and indicators.

Netflix Operating Margin Historical Pattern

Today, most investors in Netflix Stock are looking for potential investment opportunities by analyzing not only static indicators but also various Netflix's growth ratios. Consistent increases or drops in fundamental ratios usually indicate a possible pattern that can be successfully translated into profits. However, when comparing two companies, knowing each company's operating margin growth rates may not be enough to decide which company is a better investment. That's why investors frequently use a static breakdown of Netflix operating margin as a starting point in their analysis.
   Netflix Operating Margin   
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       Timeline  
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Compare to competition

Based on the recorded statements, Netflix has an Operating Margin of 20.08%. This is 182.82% higher than that of the Communication Services sector and significantly higher than that of the Entertainment industry. The operating margin for all United States stocks is notably lower than that of the firm.

Netflix Operating Margin Peer Comparison

Stock peer comparison is one of the most widely used and accepted methods of equity analyses. It analyses Netflix's direct or indirect competition against its Operating Margin to detect undervalued stocks with similar characteristics or determine the stocks which would be a good addition to a portfolio. Peer analysis of Netflix could also be used in its relative valuation, which is a method of valuing Netflix by comparing valuation metrics of similar companies.
Netflix is currently under evaluation in operating margin category among related companies.

Netflix Current Valuation Drivers

We derive many important indicators used in calculating different scores of Netflix from analyzing Netflix's financial statements. These drivers represent accounts that assess Netflix's ability to generate profits relative to its revenue, operating costs, and shareholders' equity. Below are some of Netflix's important valuation drivers and their relationship over time.
201720182019202020212022 (projected)
Net Income Per Employee101.62 K170.6 K217.08 K292.96 K452.76 K488.51 K
Revenue Per Employee2.13 M2.22 M2.34 M2.65 M2.63 M2.19 M
Average Assets16.71 B23.04 B30.58 B37.53 B43.16 B46.57 B
Earnings Before Interest Taxes and Depreciation Amortization EBITDA7.17 B9.26 B11.92 B15.51 B18.63 B20.1 B
Earnings Before Interest Taxes and Depreciation Amortization USD6.99 B9.26 B12.01 B14.89 B17.12 B18.47 B
Earnings before Tax485.32 M1.23 B2.06 B3.2 B3.68 B3.97 B
Average Equity3.25 B4.69 B6.56 B9.79 B11.25 B12.14 B
Enterprise Value86.21 B121.99 B149.8 B246.55 B283.53 B305.91 B
Free Cash Flow(1.96 B)(2.85 B)(3.14 B)1.93 B1.74 B1.87 B
Invested Capital2.54 B5.95 B12.36 B14.19 B16.32 B17.61 B
Invested Capital Average1.03 B3.99 B9.03 B12.99 B14.94 B16.12 B
Market Capitalization83.07 B116.72 B141.8 B238.89 B274.73 B296.41 B
Tangible Asset Value4.33 B5.87 B9.47 B13.9 B15.98 B17.24 B
Working Capital2.2 B3.21 B(677.19 M)1.96 B2.25 B1.88 B

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

Netflix Fundamentals

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.
Last ReportedProjected for 2022
Operating Margin 20.86  22.50 
It offers TV series, documentaries, feature films, and mobile games across various genres and languages. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California. Netflix operates under Entertainment classification in the United States and is traded on NASDAQ Exchange. It employs 11300 people.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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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
100.9 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.