Netflix Inc. (NFLX:NSD) Analysts rate with a Buy, $424 target

by: ducovest

Based on the Netflix Inc. stock forecast from 37 analysts, the average analyst target price for Netflix Inc. is USD 424.11 over the next 12 months. Netflix Inc.’s stock forecast average analyst rating is Buy. Stock Target Advisor’s own stock analysis of Netflix Inc. is Slightly Bullish, which is based on 9 positive signals and 5 negative signals. At the last closing, Netflix Inc.’s stock price was USD 186.51. Netflix Inc.’s stock price has changed by +13.41% over the past week, -154.62% over the past month and -61.85% over the last year.

Wedbush just recently upgraded the stock to Outperform from Neutral, and maintained the 12 month target forecast of $280 per share.

Netflix offers entertainment. It offers TV shows, documentaries, movies, and mobile games in multiple genres and languages. Members can watch content on TVs, digital video players, set-top boxes, and mobile devices. It also offers DVD-by-mail memberships in the US. 222 million paid members in 190 countries. Netflix was founded in 1997 in Los Gatos, California.

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk-adjusted returns

This stock has performed well, on a risk-adjusted basis, compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile.

Superior return on equity

The company management has delivered a better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior capital utilization

The company management has delivered a better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

The company management has delivered a better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Underpriced on a free cash flow basis

The stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior Earnings Growth

This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

 

What we don’t like:

High volatility

The total returns for this company are volatile and above the median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value

The stock is trading high compared to its peers’ median on a price to book value basis.

Overpriced on a cash flow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

 

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