Netflix Return On Equity vs. Return On Asset
| NFLX34 Stock | BRL 106.50 0.68 0.64% |
For Netflix profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Netflix to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Netflix utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Netflix's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Netflix over time as well as its relative position and ranking within its peers.
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Netflix Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Netflix's current stock value. Our valuation model uses many indicators to compare Netflix value to that of its competitors to determine the firm's financial worth. Netflix is considered to be number one stock in return on equity category among its peers. It also is considered to be number one stock in return on asset category among its peers reporting about 0.31 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Netflix is roughly 3.24 . Comparative valuation analysis is a catch-all model that can be used if you cannot value Netflix by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Netflix's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Netflix Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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| = | 0.25 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
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| = | 0.0756 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Netflix Return On Asset Comparison
Netflix is currently under evaluation in return on asset category among its peers.
Netflix Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Netflix, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Netflix will eventually generate negative long term returns. The profitability progress is the general direction of Netflix's change in net profit over the period of time. It can combine multiple indicators of Netflix, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
The company operates in three segments Domestic streaming, International streaming, and Domestic DVD. Netflix, Inc. was founded in 1997 and is headquartered in Los Gatos, California. NETFLIX DRN operates under Media - Diversified classification in Brazil and is traded on Sao Paolo Stock Exchange. It employs 7100 people.
Netflix Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Netflix. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Netflix position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Netflix's important profitability drivers and their relationship over time.
Use Netflix in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Netflix position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Netflix will appreciate offsetting losses from the drop in the long position's value.Netflix Pair Trading
Netflix Pair Trading Analysis
The ability to find closely correlated positions to Netflix could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Netflix when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Netflix - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Netflix to buy it.
The correlation of Netflix is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Netflix moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Netflix moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Netflix can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Netflix position
In addition to having Netflix in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Furniture
Companies producing and selling home and office furniture. The Furniture theme has 40 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Furniture Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Netflix Stock
When determining whether Netflix offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Netflix's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Netflix Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Netflix Stock:Check out Correlation Analysis. For information on how to trade Netflix Stock refer to our How to Trade Netflix Stock guide.You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
To fully project Netflix's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Netflix at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Netflix's income statement, its balance sheet, and the statement of cash flows.