In which business areas is Netflix active?
According to Reuters, Netflix, Inc. is a provider of entertainment services that acquires, licenses and produces content, including its own original programming. The company offers paid memberships in approximately 190 countries and provides a variety of television series, movies and games in different genres and languages. Members have the freedom to access content anytime, anywhere and customize their subscriptions flexibly. The streaming service is available on a wide range of internet-enabled devices, including TVs, digital video players and mobile devices. Netflix has also partnered with various cable, satellite and telecom providers to offer its service via set-top boxes. Subscription prices range from approximately 1 to 28 $ per month, while the cost of additional member accounts varies from 2 to 8 $ per month.
Netflix currently has a market capitalization of $ 301 billion, making it the largest pure streaming service provider in the world.
Is the share rally entering the next phase?
Netflix shares have staged an impressive rally since the middle of 2022. The share has risen from a low of 165 $ to over 700 $. The stock has gained 425% in just over 2 years! This was mainly due to the fact that Netflix is attracting more and more users and is now even challenging YouTube for first place in the streaming business. Netflix is particularly impressive due to its unique market position. The customer opens Netflix to choose the series. They don't look for a streaming provider based on the series they want to watch.
What can we expect from the figures? - That's what the toggle AI says:
Netflix has exceeded analysts' expectations a total of 34 times to date. It is striking that Netflix has not necessarily been able to turn positive surprises into rising share prices. For example, the median share price was 2.83% lower one week after beating expectations.
On the other hand, analysts' expectations have already been missed 10 times. Unsurprisingly, no short-term gains were achieved either. One week after the publication of the missed quarterly figures, the Netflix share fell by a median of 3.66%.
How crisis-proof is Netflix? - A look at the balance sheet
Aus vergangenen Finanz- und Geschäftsdaten lassen sich in der Fundamentalanalyse Rückschlüsse auf die aktuelle Lage eines Unternehmens ziehen. Hierbei sind Faktoren wie Verschuldung, Gewinn und Cashflow von großer Bedeutung. Um diese Kennzahlen angemessen zu interpretieren, ist es entscheidend, sie in Relation zu einem Vergleichsuniversum zu setzen. Auf diese Weise lässt sich beurteilen, ob das Unternehmen im Vergleich zu anderen in seiner Branche eine eher starke oder schwache Position einnimmt.
Netflix's balance sheet is very solid. Netflix has been able to steadily reduce its debt ratio since 2020 to a good 1TP3k. Impressively, equity has even doubled from around $ 11 billion to $ 22 billion. Shareholders particularly like to hear that!
However, Netflix's hobbyhorse in fundamental data analysis is definitely its profitability. The US streaming provider impresses with a net profit margin of 19.5% and a return on equity of an incredible 31.6%. The return on total assets amounts to 14.2%. It is particularly noteworthy that the company has succeeded in constantly increasing its profitability in recent years.
Netflix's debt-to-equity ratio is 122%. By comparison, the debt-to-equity ratio of competitor Disney is currently 92%.
This also gives Netflix a decisive advantage over its competitors. The fact that Netflix is the pioneer in streaming services has already enabled it to establish a commanding level of profitability. Competitors with newer streaming services, such as Paramount, Hulu or Prime Video, are still facing years of high capital consumption and low revenues.
Netflix shares are also benefiting from the fact that the company has been buying back shares for some time. A total of $ 5 billion shares are to be bought back in 2024. A dividend has not yet been paid.
Netflix currently has a P/E ratio of 44 and a P/B ratio of 13.6, while its competitor Disney has a P/E ratio of 24 and a P/B ratio of 1.8. The market is therefore paying a lot for Netflix.
All key financial figures were calculated on the basis of Trader Workstation and Yahoo Finance.
Technical analysis - the NFLX chart
The Netflix chart speaks a clear language: "Buy me!"
All 5 indicators of the Ichimoku cloud chart point to a positive trend. In addition, the share is above the 50-day line and even a good 11% above the 200-day line. The Relative Strength Index (RSI) indicates that a stock is overbought from a value of 70, whereas a stock is considered oversold from an RSI of 30 or lower. Netflix currently has an RSI of 44, which makes Netflix a chart technician's delight!
Conclusion: The evaluation of Netflix
Netflix impresses with its very high profitability, which the streaming giant has been able to secure thanks to its pioneering role ahead of its competitors. This also means that Netflix's pockets are deep enough to finance its own productions and thus stand out from the competition. Netflix's competitors are therefore still facing tough times.
Nevertheless, it should be noted that the streaming offer is constantly growing, but consumers' budgets are not. In the long term, it is therefore important to keep a close eye on whether Netflix can continue to differentiate itself from the competition with its content.
Netflix's balance sheet and share price performance are completely convincing. Netflix can therefore be rated BUY at this point.
