Netflix (NFLX) & The Competition Head to Head Review

Netflix (NASDAQ: NFLX) is one of 50 public companies in the “Internet Services” industry, but how does it compare to its rivals? We will compare Netflix to related businesses based on the strength of its dividends, risk, valuation, institutional ownership, earnings, profitability and analyst recommendations.

Volatility & Risk

Netflix has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Netflix’s rivals have a beta of 1.35, meaning that their average stock price is 35% more volatile than the S&P 500.

Profitability

This table compares Netflix and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Netflix 3.55% 12.82% 2.55%
Netflix Competitors -0.14% 26.79% 6.18%

Insider and Institutional Ownership

81.0% of Netflix shares are held by institutional investors. Comparatively, 63.0% of shares of all “Internet Services” companies are held by institutional investors. 4.9% of Netflix shares are held by insiders. Comparatively, 22.2% of shares of all “Internet Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Netflix and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Netflix $10.19 billion $706.92 million 237.74
Netflix Competitors $952.95 million $127.27 million 55.40

Netflix has higher revenue and earnings than its rivals. Netflix is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of recent ratings and price targets for Netflix and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netflix 2 16 29 0 2.57
Netflix Competitors 397 1543 2596 84 2.51

Netflix presently has a consensus target price of $187.57, indicating a potential downside of 3.79%. As a group, “Internet Services” companies have a potential upside of 1.84%. Given Netflix’s rivals higher possible upside, analysts plainly believe Netflix has less favorable growth aspects than its rivals.

Summary

Netflix beats its rivals on 7 of the 13 factors compared.

About Netflix

Netflix, Inc. is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company’s members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016.

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