Investment Analysis for Netflix Inc (NFLX)

Fundamental Analysis

For the fiscal year 2024, Netflix reported revenues of $39 billion, up from the previous year. However, operating expenses and costs rose significantly to $29 billion, which is a worrying sign. The company’s net income stood at $8.7 billion, which seems healthy. Yet, the growing costs and expenses could impact profitability in the future.

The company’s balance sheet showed total assets of $53.6 billion, with liabilities amounting to $28.8 billion. Although the company’s equity of $24.7 billion indicates a strong financial position, the rising liabilities could pose a risk.

In terms of cash flow, Netflix reported a net cash flow of $0.69 billion, which is relatively low. While the company’s operating activities generated $7.3 billion, its investing activities resulted in a net outflow of $2.1 billion. In addition, financing activities also led to a cash outflow of $4 billion, indicating a possible strain on liquidity.

Technical Analysis

The technical analysis for NFLX shows a slight upward trend in the stock’s price. However, the rate of increase appears to be slowing down, which could signal a potential reversal in the future. Given the high costs and operating expenses, along with increasing liabilities, this could potentially lead to a decline in the stock’s value.

Recommendation: SELL

Based on the fundamental and technical analysis, it is recommended to sell NFLX. While the company has shown revenue growth, the increasing costs and liabilities could potentially impact its profitability and stock price negatively. The relatively low net cash flow also raises concerns about the company’s liquidity. The technical analysis signals a potential reversal in the stock’s upward trend. Therefore, it might be a good time to sell the stock before its value declines.