Netflix Stock Valuation

NFLX
 Stock
  

USD 242.70  1.41  0.58%   

Do you wonder what the value of Netflix is? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Netflix, is its stock price multiplied by the total number of shares outstanding, calculating Netflix's enterprise value requires a different approach. It uses Netflix's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
Free Cash Flow is likely to rise to about 1.9 B in 2022. Enterprise Value is likely to rise to about 305.9 B in 2022.
Netflix secures a last-minute Real Value of $358.27 per share. The latest price of the firm is $242.7. At this time, the firm appears to be undervalued. Our model forecasts the value of Netflix from analyzing the firm fundamentals such as Return On Equity of 30.93 %, current valuation of 111.1 B, and Profit Margin of 16.42 % as well as examining its technical indicators and Probability Of Bankruptcy. In general, we recommend acquiring undervalued stocks and dropping overvalued stocks since, at some point, asset prices and their ongoing real values will merge together.
  
Netflix Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Netflix's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.

Netflix Most Recent Valuation Data

Price Book
5.29
EPS Estimate Next Quarter
2.77
Price Sales
3.35
EBITDA
6.2 B
Beta
1.36
Fiscal Year End
December
Industry
Entertainment
Undervalued
Today 242.70
Please note that Netflix's price fluctuation is very steady at this time. Calculation of the real value of Netflix is based on 3 months time horizon. Increasing Netflix's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Netflix is useful when determining the fair value of the Netflix stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Netflix. Since Netflix is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Netflix Stock. However, Netflix's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
219.96
Downside
358.27
Real Value
361.80
Upside
Estimating the potential upside or downside of Netflix helps investors to forecast how Netflix stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Netflix more accurately as focusing exclusively on Netflix's fundamentals will not take into account other important factors:
Earnings
Estimates (16)
LowProjected EPSHigh
10.5310.7010.80
Details
Hype
Prediction
LowEstimated ValueHigh
240.24243.77247.30
Details
Naive
Forecast
LowNext ValueHigh
230.44233.97237.50
Details
28 Analysts
Consensus
LowTarget PriceHigh
340.00668.091,154
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Netflix's intrinsic value based on its ongoing forecasts of Netflix's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Netflix's closest peers. When choosing an evaluation method for Netflix, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Netflix Investments

389.51 Million

Netflix Valuation Drivers Correlation

Many accounts on the financial statements of Netflix are highly interrelated and sometimes correlated. Consequently, when conducting Netflix's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Netflix
Click cells to compare fundamentals

Netflix Valuation Trend

Knowing Netflix's actual value is paramount for traders to make sound investment determinations. Netflix's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Netflix's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Netflix's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Netflix Market Cap

Netflix is considered to be number one stock in market capitalization category among related companies. Market capitalization of Entertainment industry is now estimated at about 1.34 Trillion. Netflix holds roughly 108.13 Billion in market capitalization claiming about 8% of equities under Entertainment industry.
Capitalization  Workforce  Total debt  Valuation  Revenue

Netflix Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Netflix's current stock value. Our valuation model uses many indicators to compare Netflix value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Netflix competition to find correlations between indicators driving Netflix's intrinsic value. More Info.
Netflix is considered to be number one stock in price to sales category among related companies. It is considered to be number one stock in beta category among related companies totaling about  0.37  of Beta per Price to Sales. The ratio of Price to Sales to Beta for Netflix is roughly  2.72 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Netflix by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Netflix's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Netflix's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Netflix's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Netflix and how it compares across the competition.

About Netflix Valuation

The equity valuation mechanism determines the current worth of Netflix on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Netflix. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Netflix based exclusively on its fundamental and basic technical indicators. By analyzing Netflix's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Netflix's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Netflix. We calculate exposure to Netflix's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Netflix's related companies.
Fiscal Year End
December
Industry
Entertainment
Concentration
Movies & Entertainment
Full Time Employees
11.3 K
Service Category
Entertainment
Employer Id Number
77-0467272
Last ReportedProjected for 2022
Gross Profit11.2 B12.1 B
Profit Margin 17.23  18.59 
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.

Netflix Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Netflix does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quick Ratio0.88
Earnings Quarterly Growth6.50%
Revenue Growth8.60%
Enterprise Value To Ebitda17.84
Earnings Growth7.70%
Enterprise Value To Revenue3.58

Netflix Current Valuation Indicators

Valuation refers to the process of determining the present value of Netflix and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Netflix we look at many different elements of the entity such as Netflix's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Netflix's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Netflix's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Netflix, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Netflix's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Netflix's worth.
Additionally, see Stocks Correlation. 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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

Complementary Tools for Netflix Stock analysis

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
103.8 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.