General Information

Company Name NETFLIX

Ticker NFLX
Stock Exchange Nasdaq
Fiscal Year Ending Dec-31
Moody's Corporate Rating Ba3
S&P Corporate Rating BB-
Predicted Beta 1.15
Marginal Tax Rate 13.00%

Options/Warrants
Tranche Number of Shares Exercise Price
Tranche 1
Tranche 2
Tranche 3
Tranche 4
TOTAL 0

Fully diluted shares outstanding

Basic Outstanding Shares 441.57
Plus: Shares from In-the-money Options 0
Less: Shares Repurchased 0.00
Net new shares from the options/warrants 0.00
Plus: Shares from Convertible Securities 0
Fully diluted shares outstanding 441.57
(shares in millions)
Assumptions
Current Share Price $ 611.31
Basic Shares Outstanding 441.57

In-the-Money Shares Proceeds

0 0
0 0
0 0
0 0
0 0
($ in millions, except per share data)
Assumptions
Current Share Price 611.31
52-week High Price 639 96%
52-week Low Price 329.62 185%
Dividend Per Share (MRQ) 0

Balance Sheet Data 2024A 9/30/2023

Cash and Cash Equivalents 7116.913 5147.176
Accounts Receivable 20.973 911.276
Inventories 0 0
Prepaids and Other Current Assets 2780.247 3208.021
Total Current Assets 9918.133 9266.473

Property, Plant and Equipment (Net) 1491.444 1398.257

Goodwill and Intangible Assets 0 0
Other Assets 31658.056 32736
Total Assets 43067.633 43400.73

Accounts Payable 747.412 671.513

Accrued Liabilities 1803.96 1514.65
Other Current Liabilities 399.844
Total Current Liabilities 2951.216 2186.163

Total Debt 1697 1693

Other Long-Term Liabilities 328.784 979.837
Total Liabilities 4977 4859

Noncontrolling Interest 0 0
Preferred Stock 0 0
Shareholders' Equity 2059 2078
Total Liabilities and Equity 7036 6937

Balance Check 36031.633 36463.73

Fully diluted shares outstanding 441.57
Equity Value 269936.2

Plus: Total Debt 1693

Plus: Preferred Stock 0
Plus: Non-Controlling Interest 0
Less: Cash and Cash Equivalents -5147.176
Enterprise Value 266482
Non-recurring Items:

($ in millions, except per share data)

Reported Income Statement
Prior Current
Fiscal Year Ending December 31, Stub Stub
2022A 2023A 2024A 9/30/2018 9/30/2019
Sales 3,162.00 3,372.00 3,494.00 3,375.00 3,600.00
COGS (incl. D&A) 1,917.00 1,972.00 1,989.00 2,200.00 2,350.00
Gross Profit 1,245.00 1,400.00 1,505.00 1,175.00 1,250.00
SG&A 681 705 717 675 720
Other Expense / (Income) 0.00 0.00 0.00 0.00 0.00
EBIT 564.00 695.00 788.00 500.00 530.00
Interest Expense 110 105 689 75 73
Pre-tax Income 454.00 590.00 99.00 425.00 457.00
Income Taxes 110 128.8 143.3 106.3 114.3
Noncontrolling Interest 0.00 0.00 0.00 0.00 0.00
Preferred Dividends 0 0 0 0 0
Net Income 344.00 461.20 -44.30 318.70 342.70
Effective Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%

Weighted Avg. Diluted Shares 100 100 100 100 100

Diluted EPS 3.44 4.61 -0.44 3.19 3.43
Assuming Year Closing 31st December
Reported Net Income 344.00 461.20 -44.30 318.70 342.70
Non-Recurring Items in COGS 30
Other Non-Recurring Items -25 15
Non-operating Non-rec. Items
Tax Adjustments 0 0 6.25 0 -11.25
Adjusted Net Income 344.00 461.20 -63.05 318.70 376.45
Adjusted Diluted EPS 3.44 4.61 -0.63 3.19 3.76
Adjusted EBIT 564.00 695.00 763.00 500.00 575.00
Adjusted EBITDA 719.00 860.00 938.00 625.00 700.00

Cash Flow Statement Data

Prior Current
Fiscal Year Ending December 31, Stub Stub
2016A 2017A 2018A 9/30/2018 9/30/2019
Cash From Operations 400 450 500 360 380
Capital Expenditures 170 185 200 150 155
% sales 5.38% 5.49% 5.72% 4.44% 4.31%
Free Cash Flow 230 265 300 210 225
% margin 7.27% 7.86% 8.59% 6.22% 6.25%
FCF / Share 2.30 2.65 3.00 2.10 2.25

Depreciation & Amortization 155 165 175 125 125

% sales 4.90% 4.89% 5.01% 3.70% 3.47%

Calculate: 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎

Adjusted LTM gross profit 1,680.00 Step 18 −𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦))
Adjusted LTM EBIT 725.00 Step 19
Adjusted LTM EBITDA 900.00 Step 20
Adjusted Net Income 468.70 Step 21 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐸𝑞𝑢𝑖𝑡𝑦= (𝐿𝑇𝑀
LTM Return on Average Invested Capital -30.61% Step 22 𝐼𝑛𝑐𝑜𝑚𝑒)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 (𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′
LTM Return on Average Equity 22.66% Step 23
LTM Return on Average Assets 1.08% Step 24
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑠𝑠𝑒𝑡𝑠= (𝐿𝑇𝑀
LTM Implied Annual Dividend Per Share 0.00% Step 25 𝐼𝑛𝑐𝑜𝑚𝑒)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 (𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠))
Debt-to-Total Capitalisation 44.90% Step 26
Total Debt-to-EBITDA 1.88 Step 27
Net Debt-to-EBITDA -3.84 Step 28
𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙𝑖𝑠𝑎𝑡𝑖𝑜𝑛=𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡+
EBITDA-to-Interest Expense 9.00 Step 29
(EBITDA - Capex)-to-Interest Expense 6.95 Step 30
EBIT-to-Interest Expense 7.25 Step 31
𝑁𝑒𝑡 𝐷𝑒𝑏𝑡=𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 −𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐶
LTM
9/30/2019 CAGR
4,725.00 5.12% 3672.852
3,075.00
1,650.00 Step 1
945
0.00
705.00 Step 2
100
605.00 Step 3
151.3
0.00
0
453.70 Step 4
25.00%

100
4.54 Step 5

453.70
30 Step 9
-10 Step 6-7-8

-5 Step 10
468.70 Step 11
4.69 Step 12
725.00
900.00

LTM
9/30/2019
520
205
4.34% Step 13
315 Step 14
6.67% Step 15
3.15 Step 16

175
 3.70% Step 17

𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎𝑙= (𝐿𝑇𝑀 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝐸𝐵𝐼𝑇)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 (𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 −𝐶𝑎𝑠ℎ

𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦))

𝑣𝑒𝑟𝑎𝑔𝑒 𝐸𝑞𝑢𝑖𝑡𝑦= (𝐿𝑇𝑀 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝑁𝑒𝑡

𝑣𝑒𝑟𝑎𝑔𝑒 (𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦))

𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑠𝑠𝑒𝑡𝑠= (𝐿𝑇𝑀 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝑁𝑒𝑡

𝑣𝑒𝑟𝑎𝑔𝑒 (𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠))

𝑎𝑙𝑖𝑠𝑎𝑡𝑖𝑜𝑛=𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡+𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟^′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦

𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 −𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐶𝑎𝑠ℎ 𝐸𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠

 1 2
LTM NFY NFY+1
9/30/2019 2019E 2020E
EV/Sales 56.4 53.3 49.8
Metric (Sales) 4725 5000.00 5350.00
EV/EBITDA 296.1 280.5 260.0
Metric (EBITDA) 900 950 1025
EV/EBIT 367.6 348.3 323.0
Metric (EBIT) 725 765 825
P/E 130.3 119.9 111.1
Metric (EPS) 4.69 5.1 5.5
FCF Yield (FCF/Equity Value) 0.1% 0.1% 0.2%
Metric (FCF) 315 375 415

Growth Rates
Sales EBITDA FCF
Historical
1-year ('17 to '18) 3.62% 9.07% 13.21%
2-year CAGR ('16 to '18) 5.12% 14.22% 14.21%
Estimated
1-year ('18 to '19E) 43.10% 1.28% 25.00%
2-year CAGR ('18 to '20E) 23.74% 4.53% 17.62%

($ in millions, except per share data)

LTM Financial Statistics
Company Sales Gross Profit EBITDA
BuyerCo 6559.60 2328.70 1443.10
Sherman Co. 5894.60 1945.20 1047.00
Pearl Corp. 4284.50 1585.30 838.70
Gasparro Corp. 4725.00 1680.00 900.00
Kumra Inc. 3186.70 922.40 665.30
Mean 4930.08 1692.32 978.82
Median 4725.00 1680.00 900.00

LTM Financial Data

Company Debt Shareholders' Equity Cash
BuyerCo 2200.00 2480.00 400.00
Sherman Co 3150.00 2359.00 649.00
Pearl Corp. 1500.00 2559.60 868.10
Gasparro Corp. 1693.00 2078.00 5147.18
Kumra Inc. 891.20 2687.60 481.30

LTM Leverage Ratios

Company Debt/TotCap(%) Debt/EBITDA(x) Net Debt/EBITDA(x)
BuyerCo 47.01% 1.52 1.25
Sherman Co 57.18% 3.01 2.39
Pearl Corp. 36.95% 1.79 0.75
Gasparro Corp. 44.90% 1.88 -3.84
Kumra Inc. 24.90% 1.34 0.62
Mean 42.19% 1.91 0.23
Median 44.90% 1.79 0.75
 3
NFY+2
2021E
47.4
5625.00
247.9
1075
308.1
865
106.3
5.75
0.2%
455

EPS

-113.67%
#NUM!

-908.88%
#NUM!

cial Statistics LTM Profitability Margins

EBIT Net Income Gross Profit(%) EBITDA(%)EBIT(%)Net Income(%)
1279.10 852.50 36% 22% 19% 13%
752.20 507.20 33% 18% 13% 9%
624.50 393.40 37% 20% 15% 9%
725.00 468.70 36% 19% 15% 10%
505.90 306.40 29% 21% 16% 10%
777.34 505.64 34% 20% 16% 10%
725.00 468.70 36% 20% 15% 10%

Interest Expense Capex EBITDA EBIT

142.40 196.80 1443.10 1279.10
76.00 235.80 1047.00 752.20
100.00 128.50 838.70 624.50
100.00 205.00 900.00 725.00
60.30 143.40 665.30 505.90

LTM Coverage Ratios

EBITDA/Int. Exp.(x)EBITDA-Cpx/Int.(x) EBIT/Int. Exp.(x)
10.13 8.75 8.98
13.78 10.67 9.90
8.39 7.10 6.25
9.00 6.95 7.25
11.03 8.66 8.39
10.47 8.43 8.15
10.13 8.66 8.39
Company Sales EBITDA EBIT EPS
BuyerCo 6,559.60 1,443.10 1,279.10 6.09
Sherman Co. 5,894.60 1,047.00 752.2 3.62
Pearl Corp. 4,284.50 838.7 624.5 5.21
Gasparro Corp. 4,725.00 900.00 725.00 4.69
Kumra Inc. 3,186.70 665.3 505.9 3.33

ENTERPRISE VA
Company Current Share Price Equity Value Enterprise Value LTM Sales
BuyerCo 70 9,800.00 11,600.00 1.8
Sherman Co. 40 5,600.00 8,101.00 1.4
Pearl Corp. 68.5 5,171.80 5,803.70 1.4
Gasparro Corp. 611.31 269936.1567 266481.9807 56.4
Kumra Inc. 52.5 4,851.60 5,344.60 1.7
Mean 168.5 59071.9 59466.3 12.5
Median 68.5 5600.0 8101.0 1.7

($ in millions, except per share data)

Financial Metric (LTM EBITDA) 700 700
Multiple Range
Implied Enterprise Value Range
Less: Net Debt -1500.00 -1500.00
Implied Equity Value
Fully Diluted Shares 80.00 80.00
Implied Share Price

($ in millions, except per share data)

Financial Metric (LTM Net Income) 300 300
Multiple Range
Implied Equity Value
Fully Diluted Shares 80.00 80.00
Implied Share Price
ENTERPRISE VALUE/ PRICE/
LTM EBITDLTM EBI LTM EPS
8.0 9.1 11.5
7.7 10.8 11.0
6.9 9.3 13.1
296.1 367.6 130.4
8.0 10.6 15.8
65.4 81.5 36.4
8.0 10.6 13.1