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General information
Netflix Inc. is an Internet subscription service for watching television shows and movies. Subscribers can instantly watch unlimited television shows and movies streamed over the Internet to their televisions, computers, and mobile devices and in the United States, subscribers can receive standard definition DVDs and Blu-ray Discs delivered to their homes.
  • Good financial results growth rate 24.5% (average between last period year over year growth for revenue and EBITDA), there is slowdown compared to average historical growth rates (54.6%)
  • Dividend yield for the last twelve months 0.0%
  • Free cash flow yield 0.6% (LTM)
  • Share price is 164.2% higher than minimum and 12.6% lower than maximum for the last 3 years
  • The company is undervalued by EV / LTM EBITDA multiple compared to target level (51.7x vs 107.7x)
  • Fundamental value created in LTM (estimate) 13.4%
Key Financials
Ticker: NFLX
Share price, USD: 486.24
Common stocks: 438 251 289
Dividend Yield:  0.0%
FCF Yield LTM: 0.6%
EV / LTM EBITDA: 51.7x
Last revenue growth (y/y):  22.7%
Last growth of EBITDA (y/y):  26.2%
Historical revenue growth:  30.0%
Historical growth of EBITDA:  79.2%
Target EV / EBITDA (hist 75% percentile): 107.7x
Express share price potential: 114.6%
Fundamental value created in LTM: 13.4%
EV / LTM EBITDA mutiple calculation
Market Cap ($m): 213 095
Net Debt ($m): 7 655
EV (Enterprise Value): 220 750
EBITDA LTM ($m): 4 271
EV / LTM EBITDA: 51.7x

Revenue and EBITDA

Quarterly values ($m)

Change (y/y)

Cash Flow

Free Cash Flow ($m)

Net Debt / Cash and Equivalents ($m)

Share price and dividends

Share price

Payment USD per share

Multiple and potential

EV / LTM EBITDA and 75% percentile

Potential dynamics

Value Creation

Fundamental Value Creation is calculated as ratio of value created in the last period to current market cap of the company.

The fundamental value can be created in two ways:
• cash generation in form of dividend payments or debt reduction or share buybacks
• growth of the company enterprise value through improving financial results

The growth of enterprise value in the last period is estimated as product of:
• annualized increase of EBITDA in the last reporting period year over year
• relevant EV/EBITDA multiple (average between actual EV/EBITDA for the company and average general level of 10.0x is applied)

Parameter
#
Formula
Value
    
    
            EBITDA (pre LTM Q)
(1)
1 064
            EBITDA (last Q)
(2)
1 343
            EBITDA LTM
(3)
4 271
    
    
        EBITDA LTM / last Q
(4)
(3) / (2)
3.180
    Gain of EBITDA (mln $)
(5)
( (2)-(1) ) * (4)
887
    
    
            EV
(6)
220 750
        Mult
(7)
(6) / (3)
51.7x
        Mult common
(8)
const
10.0x
    Mult avg
(9)
avgerage
30.8x
    
    
    Equity+
(10)
(5) * (9)
27 366
    FCF LTM
(11)
1 231
    
    
Value+
(12)
(10) + (11)
28 597
Cap
(13)
213 095
    
    
Fundamental value creation
(14)
(12) / (13)
13.4%

Potential

EBITDA LTM       4 271
 
EBITDA E       4 317
Mult aim       107.7x
 
EV E       464 847
NetDebt corr       7 557
 
Cap E       457 290
Cap       213 095
Growth potential            114.6%

Website traffic (visits bln/month) netflix.com

Three months progress: -5.5%