Netflix Inc (NASDAQ:NFLX) is ranked as a Buy using Portfolio Grader's algorithmic stock evaluator. This analytical tool evaluates stocks by employing proprietary fundamental and quantitative algorithmic. The current overall Portfolio Grader recommendation on the shares has changed twice in the past month, which represents a greater level of change than is typical. The Buy recommendation, which was recently up graded from a Hold to Buy, for Netflix Inc resulted from a process of analysis that is proprietary which generated outcomes that were above average in 4 areas: a ranking in its sector group that is in the top half, ranking in its industry group that is in the top quarter, a numerical calculation of risk/reward that is better than average and analytical scores that are above average; and produced below average conclusions in 2 areas: an economic sector ranked below average in attractiveness, and an industry group rated below average in attractiveness.
NFLX ranks in the top quarter of its industry group, Cable/Satellite TV, and in the top 10% of its sector group, Consumer Services, with a market value of $118.8 billion.
The Consumer Services sector is ranked number 11 among the 20 sectors in the Portfolio Grader universe putting it in the third quartile of all the GICS sectors. The Cable/Satellite TV industry group is ranked 115 among the 129 industry groups within the GICS sectors, placing it well below-average in terms of the Proprietary Quantitative Score scoring system.
NFLX has realized above-average scores in 5 of the 8 fundamental areas analyzed by Portfolio Grader and average or below-average grades in 3 of the areas used in the ranking of company stocks.
The company's operational scores are a source of strength with a ranking for sales growth, operating margin and earnings growth that are well above average. Scores for visibility of earnings are mixed, with a ranking for earnings revisions that is much better than the industry average but rankings for earnings surprises and earnings momentum worse than average. NFLX's ranking for return on equity is markedly better than its industry group average but its grade for cash flow is below-average. These fundamental scores give Netflix a position in the top decile of the industry group.
Portfolio Grader quantitatively measures NFLX's shares using the Proprietary Quantitative Score. This metric looks at NFLX's shares from the perspective of risk/reward. This unique scoring methodology evaluates the relative value of the company's shares based on the recent $265.07 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Considering this risk/reward calculation, NFLX currently scores as average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being 'strong buy' and F being 'strong sell'. Explore the tool here.
Commentary provided by UpTick Data Technologies.
