Netflix Stock Analysis

Invesdea πŸ’° Investing Ideas
2 min readJul 9, 2022

Netflix stock price is below 200 now, could it go back to 700? Let's take a look

Netflix is still the leading streaming service in the US. Source: Netflix

Growth 🌱

  • Revenue Q/Q (7.16B -> 7.87B) +10% πŸ‘Ž
  • Revenue TTM (26.39B -> 30.4B) +15% πŸ‘Ž
  • Number of subscribers decreased 200K from previous quarter for the first time in a decade. Next quarter’s number could even be worse. πŸ‘Ž

β€œour relatively high household penetration β€” when including the large number of households sharing accounts β€” combined with competition, is creating revenue growth headwinds” β€” Netflix

source: Netflix

Profitability πŸ’°

  • Gross Margin 46%
  • Operating Margin 25%
  • Net Margin 20%
  • Gross Profit Q/Q (3.29B -> 3.58B) +9% πŸ‘Ž
  • Gross Profit TTM (11.59B -> 14.07B) +21%
  • Operating Expenses Q/Q (1.34B -> 1.61B) +21%
  • Operating Expenses / Gross Profit (1.61B / 3.58B) 45% πŸ‘Ž

Valuation βš–οΈ

  • Market Cap: 80B
  • P / S: 3 πŸ‘
  • P / Gross Profit: 6 πŸ‘
  • P / Operating Income: 13 πŸ‘
  • P / E: 16 πŸ‘

News πŸ“°

  • Rumored to buy Roku. πŸ‘
  • Announced it will add an ad-supported, cheaper subscription tier. πŸ‘

Bull Says πŸ“ˆ

  • Netflix CEO Reed Hastings is visionary and experienced. He helped Netflix to grow from a DVD rental company to a streaming/entertainment giant. So he will be able to turn Netflix around again.
  • Netflix current valuation looks very attractive compared to its peers.

Bear Says πŸ“‰

  • Streaming industry is too crowded and competitive while the user time is limited.