Netflix Enterprise Value Analysis and Fundamentals Review

Netflix's enterprise value is a staggering $300 billion, making it one of the most valuable media companies in the world.

This massive valuation is a result of Netflix's impressive growth over the years, with its subscriber base increasing from 20 million in 2010 to over 220 million today.

Netflix's ability to adapt to changing consumer behavior and technological advancements has been a key factor in its success, allowing it to expand into new markets and offer a wide range of content to its subscribers.

The company's focus on original content has also been a major driver of its growth, with hits like "Stranger Things" and "The Crown" helping to attract new subscribers and retain existing ones.

Netflix's financial analysis reveals a significant increase in enterprise value over the years. This growth can be attributed to the company's ability to adapt to changing consumer behavior and technological advancements.

In 2020, Netflix's enterprise value reached $250 billion, a substantial jump from $100 billion in 2015. This increase in value is a testament to the company's successful expansion into new markets and its ability to maintain a strong brand presence.

Netflix's financial health is also reflected in its revenue growth, which has consistently exceeded 20% annually over the past five years.

Cash Flow is a crucial metric for investors, and let's take a look at Netflix's numbers. In the last 12 months, the company generated an impressive 10.59 billion in operating cash flow.

Netflix's free cash flow is calculated by subtracting capital expenditures from operating cash flow, resulting in a free cash flow of 9.96 billion. This means the company has a significant amount of cash available for investments, debt repayment, or returning to shareholders.

A key point to note is that Netflix spent a substantial amount on stock buybacks, with the largest haul being $480 million in the first calendar quarter of 2021. This is more than double the company's second-largest single-quarter buyback amount.

Here's a breakdown of Netflix's cash flow metrics:

The free cash flow yield is an important metric for investors, and it's calculated by dividing free cash flow by the company's market capitalization. In Netflix's case, the free cash flow yield is a relatively low 1.58%. This means the company's cash flow is not generating a high return on investment, but it's still a positive sign for investors.

Financial ratios are a great way to evaluate a business or company, and they're used by managers, shareholders, creditors, and even security analysts to compare the strengths and weaknesses of various companies.

There are four main categories of financial ratios: growth ratios, profitability ratios, capital structure and liquidity ratios, and asset utilization ratios. Growth ratios measure a company's rate of growth and assess its potential for future growth, such as Net Sales Growth, EBITDA Growth, and EBIT Growth.

Profitability ratios measure the returns generated on sales and investment, which helps determine a company's ability to generate profits. Margin ratios, such as profit margin or operating margin, and return ratios, such as return on equity or return on assets, are examples of profitability ratios.

Capital structure and liquidity ratios measure a company's reliance on debt to fund its operations and its ability to pay back the debt. Debt to equity and debt to asset ratios are examples of capital structure ratios, while coverage ratios and solvency ratios are examples of liquidity ratios.

Asset utilization ratios, also called activity or efficiency ratios, measure how efficiently a company's day-to-day operations manage inventory, sell and produce products, or use assets to generate revenue.

Here are some examples of financial ratios:

The trailing PE ratio for Netflix is 50.16, which is significantly higher than the industry average.

Netflix's EV/EBITDA ratio is 39.56, which is lower than some of its competitors in the entertainment industry.

A lower EV/EBITDA ratio can indicate that a company is undervalued, but it's essential to consider other factors such as growth rates and industry trends.

Netflix has an EBITDA growth rate of -10%, which is a significant decline from previous years.

Here's a comparison of Netflix's valuation metrics with some of its competitors in the industry:

These valuation metrics provide a snapshot of Netflix's financial health and growth prospects, but it's crucial to consider multiple factors before making any investment decisions.

Netflix's income statement shows a revenue of CAD 56.12 billion in the last 12 months, with profits of 12.53 billion.

The company's gross profit is 25.85 billion, while its operating income is 14.99 billion. This indicates a significant amount of money is being spent on operating expenses.

Here's a breakdown of Netflix's key income statement metrics:

This information can be useful for investors and analysts looking to understand Netflix's financial performance.

Netflix's income statement is a telling tale of the company's financial health. In the last 12 months, Netflix raked in CAD 56.12 billion in revenue.

The company's gross profit was a significant CAD 25.85 billion, indicating that they were able to keep a substantial portion of their revenue after accounting for the cost of goods sold.

Netflix's operating income was a respectable CAD 14.99 billion, a clear sign of the company's ability to generate profits from its core business operations.

Here's a breakdown of Netflix's income statement:

The company's earnings per share (EPS) was a healthy 28.53, indicating that each share of Netflix stock earned that amount in profit.

A company's balance sheet provides a snapshot of its financial situation at a particular point in time. It's like a snapshot of your bank account balance, but for a company.

The balance sheet typically includes the company's assets, liabilities, and equity. In this case, the company has a significant amount of debt, with a total of 25.89 billion dollars.

The net cash position is a key metric on the balance sheet, and in this case, it's negative 12.10 billion dollars. This means the company owes more money than it has in cash and cash equivalents.

Here's a breakdown of the company's cash and debt:

The company's equity, also known as its book value, is 35.60 billion dollars. This is the amount that would be left over if the company were to liquidate all its assets and pay off all its debts.

Netflix has a market capitalization of $443.09 billion, making it a significant player in the market.

The company's current valuation stands at $458.82 billion, indicating a substantial market presence. Its shares outstanding total 427.76 million, giving investors a tangible stake in the company's success.

Netflix has a strong cash position, with $5.15 billion in cash and equivalents. This allows the company to invest in new projects and maintain a healthy financial cushion.

The company's debt-to-equity ratio is 0.80%, indicating a relatively low level of debt compared to its equity. This is a positive sign for investors, suggesting that Netflix is well-managed and financially stable.

Here's a breakdown of Netflix's key financial metrics:

Netflix's strong financial position is reflected in its ability to generate significant revenue, with $39 billion in revenue and $24.88 billion in EBITDA.