Enterprise Value to FCFF (EV/FCFF)
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- Income Statement
- Analysis of Profitability Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Free Cash Flow to The Firm (FCFF)
Netflix Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net cash provided by operating activities
- There was a significant decline from 2,427,077 thousand USD at the end of 2020 to 392,610 thousand USD by the end of 2021. This was followed by a strong recovery to 2,026,257 thousand USD in 2022, and then a notable increase to over 7 million thousand USD in both 2023 and 2024. The cash flows stabilized at a high level in 2023 and 2024, indicating improved operational cash generation capacity in the most recent years.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm mirrored the trend of operating cash flows. It decreased sharply from 2,585,251 thousand USD in 2020 to 539,845 thousand USD in 2021, followed by a recovery to 2,214,967 thousand USD in 2022. Subsequently, it rose significantly to over 7.5 million thousand USD in 2023 and slightly declined but remained stable around this level in 2024. This pattern suggests that after a dip in 2021, the company's ability to generate cash flow available to all capital providers strengthened markedly and consistently in the last two years.
Interest Paid, Net of Tax
Netflix Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited moderate fluctuations over the analyzed period. It started at 14% in 2020, then declined to 12% in 2021, indicating a decrease in tax expense relative to pre-tax income. This was followed by an increase to 15% in 2022, suggesting a temporary rise in tax liability or changes in tax regulations or income mix. In the subsequent years, 2023 and 2024, the rate stabilized at 13%, reflecting a relatively consistent tax burden in those years.
- Interest Paid, Net of Tax
- The interest expense net of tax showed a declining trend throughout the period. Beginning at approximately 656 million US dollars in 2020, it increased slightly to about 672 million in 2021, but then steadily decreased over the following years to roughly 596 million in 2022, about 596 million in 2023, and further down to approximately 587 million in 2024. This pattern suggests effective management of interest-bearing liabilities, perhaps through refinancing, repayment of debt, or favorable interest rates, leading to a gradual reduction in net interest payments.
Enterprise Value to FCFF Ratio, Current
Netflix Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Alphabet Inc. | |
| Comcast Corp. | |
| Meta Platforms Inc. | |
| Take-Two Interactive Software Inc. | |
| Walt Disney Co. | |
| EV/FCFF, Sector | |
| Media & Entertainment | |
| EV/FCFF, Industry | |
| Communication Services | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Netflix Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| EV/FCFF, Sector | ||||||
| Media & Entertainment | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- Over the observed period, the enterprise value experienced significant fluctuations. It initially decreased from approximately 246.6 billion US dollars at the end of 2020 to around 170.8 billion by the end of 2022. Following this decline, there was a marked increase in 2023 to about 254.3 billion, which then escalated sharply to approximately 421.7 billion by the end of 2024. This pattern suggests a period of contraction followed by substantial growth in the valuation of the entity.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow demonstrated considerable variability throughout the timeline. It started at around 2.6 billion US dollars in 2020 and dropped significantly to about 540 million in 2021. Subsequently, FCFF rebounded strongly to nearly 2.2 billion in 2022, followed by a substantial increase in 2023, reaching approximately 7.5 billion. The FCFF remained relatively stable into 2024, sustaining a level close to that of the previous year. Overall, the trend shows an initial decrease followed by a robust recovery and stabilization at a high cash flow level.
- EV to FCFF Ratio
- The ratio of enterprise value to free cash flow to the firm displayed notable volatility. In 2020, the ratio was approximately 95.4, indicating a relatively high valuation relative to cash flow. In 2021, the ratio spiked dramatically to over 335, reflecting a significant increase in valuation multiples or a contraction in cash flow. Subsequently, the ratio decreased sharply to around 77.1 in 2022 and continued to decline to approximately 33.8 by the end of 2023, suggesting an improvement in cash flow relative to enterprise value or a reduction in valuation. However, in 2024, the ratio rose again to about 56.2, indicating a moderate increase in valuation multiples relative to cash flow.