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Netflix Inc NFLX

Morningstar Rating
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Stock XNAS Rating as of
$680.09 +10.41 (1.55%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Netflix: First Step Into Major Sports With Christmas NFL Games Isn’t a Needle Mover but Shows Power

Matthew Dolgin, Michael Hodel

The National Football League's announcement that Netflix will be the exclusive home for a total of at least four NFL games over the next three Christmases doesn't affect our $440 fair value estimate. We don't expect significant subscriber benefits from these games, and The Wall Street Journal reported Netflix will pay about $75 million per game, which is not substantial in the context of the firm's annual content spending. However, the NFL's decision to partner with Netflix and highlight the global nature of the streaming rights hints at the value of Netflix's platform and its unparalleled global reach.

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Price vs Fair Value

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NFLX is trading at a 585% premium.
Price
$669.38
Fair Value
$469.00
Uncertainty
High
1-Star Price
$599.00
5-Star Price
$942.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Netflix has already created many hit shows that are exclusively available on its platform and have attracted a massive customer base. The firm’s advantage in cash generation versus competitors makes it more likely this virtuous cycle can continue, with Netflix creating more content that attracts and holds its subscribers.

Bears

Netflix is beginning to face competition that it has not had to deal with in the past. As consumers have more options for quality streaming services, it’s more likely that Netflix could get cut out of some consumer budgets.

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Trading Information

Previous Close Price
$669.68
Day Range
$665.24–680.65
52-Week Range
$344.73–680.65
Bid/Ask
$679.58 / $680.29
Market Cap
$292.89 Bil
Volume/Avg
1.9 Mil / 3.4 Mil

Key Statistics

Price/Earnings (Normalized)
46.65
Price/Sales
8.56
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
2.51%

Company Profile

Netflix’s relatively simple business model involves only one business, its streaming service. It has the biggest television entertainment subscriber base in both the United States and the collective international market, with almost 250 million subscribers globally. Netflix has exposure to nearly the entire global population outside of China. The firm has traditionally avoided live programming or sports content, instead focusing on on-demand access to episodic television, movies, and documentaries. The firm recently began introducing ad-supported subscription plans, giving the firm exposure to the advertising market in addition to the subscription fees that have historically accounted for nearly all its revenue.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Large Growth
Total Number of Employees
13,000
Website
https://www.netflix.com

Competitors

Valuation

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Metric
NFLX
WBD
CMCSA
Price/Earnings (Normalized)
 46.65—9.15
Price/Book Value
 13.500.401.78
Price/Sales
 8.560.441.26
Price/Cash Flow
 41.220.955.55
Price/Earnings
NFLX
WBD
CMCSA

Financial Strength

Metric
NFLX
WBD
CMCSA
Quick Ratio
 0.890.550.49
Current Ratio
 1.070.820.59
Interest Coverage
 10.53−0.665.99
Quick Ratio
NFLX
WBD
CMCSA

Profitability

Metric
NFLX
WBD
CMCSA
Return on Assets (Normalized)
 13.51%−1.84%6.32%
Return on Equity (Normalized)
 30.73%−5.08%19.98%
Return on Invested Capital (Normalized)
 19.50%−0.61%10.60%
Return on Assets
NFLX
WBD
CMCSA
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Entertainment Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
The Walt Disney Co
DIS
BccdwyyLdwc$182.2 Bil
 Live Nation Entertainment Inc
LYV
JyqppvmdwQczczfv$20.5 Bil
 Warner Bros. Discovery Inc Ordinary Shares - Class A
WBD
PzqzjstvvZkkd$17.7 Bil
 Warner Music Group Corp Ordinary Shares - Class A
WMG
XjspcybqwCqclrz$16.3 Bil
 News Corp Class A
NWSA
BcvhxwtMjfk$15.5 Bil
 News Corp Class B
NWS
BdpxhjlYxr$15.5 Bil
 Fox Corp Class A
FOXA
ZzfgxyjpZpwtv$15.0 Bil
 Fox Corp Class B
FOX
NccssdfcvFbjv$15.0 Bil
 Sirius XM Holdings Inc
SIRI
ScppjcydwCtfzf$10.0 Bil

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