Netflix Inc Stock Forecast:
According to predictions from 50 analysts, the mean projected price for Netflix Inc’s stock over the next year is USD 298.32. On average, analysts recommend buying Netflix Inc’s stock. However, Stock Target Advisor‘s analysis, which considers 7 positive and 6 negative signals, rates the stock as Neutral. At the most recent market close, the price of Netflix Inc’s stock was USD 303.79. The stock has experienced declines of -2.57% over the past week, -15.95% over the past month, and -11.62% over the previous year.
Analyst Coverage Change:
Citigroup maintains Netflix with a “Buy” rating and raises the price target to $400 from $395 on the company’s stock.
Positive Fundamentals:
Netflix stock has several favorable attributes that make it an attractive investment. The company has a high market capitalization, indicating its size and stability. It has delivered superior returns on equity, invested capital, and assets in the most recent four quarters, placing it in the top quartile of its peers. Netflix also has positive cash flow and positive free cash flow, indicating its ability to generate cash and reinvest in its operations.
The company has shown top quartile earnings growth in the previous five years compared to its sector. Overall, these factors suggest that Netflix is a well-managed and financially healthy company with strong growth potential, making it an appealing investment opportunity.
Negative Fundamentals:
Netflix stock has several concerning factors that investors should consider before investing. Firstly, the total returns for the company are volatile and have been above the median for its sector in the past 5 years, indicating high volatility. Secondly, the stock is trading high compared to its peers on a price to earnings basis, price to book value basis, and price to cash flow basis, suggesting that it may be overpriced.
Furthermore, the company is highly leveraged, ranking in the bottom half compared to its sector peers on debt to equity. Although this may indicate that the company is trying to grow aggressively, investors should exercise caution and consider the company’s management statements and news.
Lastly, the stock is overpriced on a price to free cash flow basis, priced above the median for its sectors, which further highlights the possibility of overvaluation. Therefore, investors need to have a high-risk tolerance if they are considering investing in Netflix stock.
FA Score (Fundamental Analysis):
The fundamental analysis of Netflix Inc. stock is “Neutral” with a FA score of 5.4 out of 10, where 0 is very bearish and 10 is very bullish.
