Netflix (NFLX)
Key Statistics
EV/EBIT = 40.6x
ROE = 26.15%
Debt/Equity = 82%
FCF Yield = 2.57%
Dividend Yield = 0%
Market Capitalization = $275.3 billion
The Company
Netflix (NFLX) is a streaming entertainment company that revolutionized how we watch TV shows and movies.
Boasting over 260 million paid subscribers worldwide, Netflix delivers streaming content from multiple devices, from smartphones to smart TVs.
Beyond streaming popular shows and movies, Netflix is a major player in original content production, pouring resources into creating blockbuster series like Stranger Things and The Crown.
Netflix navigates a competitive industry fraught with challenges from traditional television, competing streaming platforms, video games' allure, and social media's pervasive influence.
Since its inception, Netflix has reshaped and revolutionized the entertainment industry. While other players have attempted to emulate its success by launching their streaming services, they have yet to match Netflix's scale and profitability. By pioneering the concept of a widely-scaled distribution platform, Netflix set a new standard for content delivery and consumption, forever altering how we engage with entertainment.
Its early entry into the streaming market gave it a significant advantage, allowing it to establish itself as the undisputed leader in the field. As a result, competitors now play catch-up, striving to replicate Netflix's success. At this late stage, these attempts are in vain.
Despite the intense competition, Netflix remains committed to its core principles of delivering captivating content and enhancing the viewing experience for its subscribers. Netflix deepens its moat by continually refining its user interface, investing in original programming, and embracing technological advancements.
Marc Randolph and Reed Hastings founded Netflix.
The inception of Netflix can be traced back to a pivotal moment in 1997 when Reed Hastings and his co-founder Marc Randolph embarked on a fateful car ride. Their frustration with a $40 late fee for returning a rented Apollo 13 copy to Blockbuster sparked a revolutionary idea in Hastings' mind. He envisioned a groundbreaking subscription-based DVD rental service that would abolish punitive late fees and grant customers unrestricted access to an extensive catalog of films.
The irony of this situation is palpable: a seemingly innocuous late fee from Blockbuster catalyzed a series of events that would ultimately spell the demise of the video rental giant.
In April 1998, Netflix was officially launched. The company offered customers the convenience of renting DVDs online and delivering them to their doorstep via mail. The company's subscription-based model was revolutionary, offering unlimited rentals for a flat monthly fee and no late fees—a stark departure from the traditional video rental business.