25 26 27 29 30 32 33 35 37 38 40 42 44 47
345 362 380 399 419 440 462 485 509 535 561 589 619 650
(3) (3) (3) (3) (3) (4) (4) (4) (4) (4) (5) (5) (5) (5)
(1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1)
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
106,531 111,857 117,450 123,322 129,489 135,963 142,761 149,899 157,394 165,264 173,527 182,203 191,314 200,879
731,147 767,705 806,090 846,395 888,714 933,150 979,807 1,028,798 1,080,238 1,134,250 1,190,962 1,250,510 1,313,036 1,378,687
41,418 43,489 45,664 47,947 50,344 52,861 55,504 58,280 61,193 64,253 67,466 70,839 74,381 78,100
14,880 14,346 13,832 13,336 12,857 12,396 11,952 11,523 11,110 10,711 10,327 9,957 9,600 9,256
DCF Valuations ($000)
Company Name NETFLIX INC
Most Recent Fiscal Year End 12/31/2004
Date of Valuation 3/1/2005
Cost of Common Equity 10.00%
Fiscal Year of Forecast 12/31/2005 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015
Valuation to Common Equity
Free Cash Flow to Common Equity (29,336) (17,607) (21,365) (8,146) 16,886 52,216 54,827 57,568 60,446 63,469 66,642
Present Value of FCF (26,669) (14,552) (16,052) (5,564) 10,485 29,475 28,135 26,856 25,635 24,470 23,358
Present Value Beyond 20 Years 322,715
Present Value of First 20 Years 273,374
Forecast Equity Value Before Time Adj. 596,089
Forecasted Value as of Valuation Date 636,499
Less Value of Contingent Equity Claims 0
Value Attributable to Common Equity 636,499
Common Shares Outstanding at BS Date 52,732
Equivalent Shares at Valuation Date 52,732
Forecast Price/Share $12.07
Valuation All Investors
Cost of Debt 8.00%
Cost of Preferred Stock 9.00%
After Tax Weighted Average Cost of Capital 8.91%
Free Cash Flow to Debt 19 10 10 97666677
Present Value of FCF to Debt 18 9865433333
Value of Debt 172
Free Cash Flow to Preferred Stock 0 0 0 0 0 0 0 0 0 0 0
Present Value of FCF to Preferred Stock 0 0 0 0 0 0 0 0 0 0 0
Value of Preferred Stock 0
Free Cash Flows to Investors (29,316) (17,597) (21,360) (8,146) 16,883 52,215 54,826 57,567 60,445 63,468 66,641
Present Value of FCF to Investors (26,919) (14,837) (16,536) (5,791) 11,020 31,297 30,174 29,092 28,049 27,043 26,073
Entity Value 819,645
Less Value of Debt (172)
Less Value of Preferred Stock 0
Forecast Equity Value Before Time Adj. 819,473
Forecasted Value as of Valuation Date 875,027
Less Value of Contingent Equity Claims 0
Value Attributable to Common Equity 875,027
Common Shares Outstanding at BS Date 52,732
Equivalent Shares at Valuation Date 52,732
Forecast Price/Share $16.59
12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2029
69,974 73,473 77,147 81,004 85,054 89,307 93,772 98,461 103,384 108,553 113,981 119,680 125,664 131,947
22,296 21,283 20,315 19,392 18,510 17,669 16,866 16,099 15,367 14,669 14,002 13,366 12,758 12,178
7 8 8 9 9 10 10 11 11 12 12 13 13 14
3 3 3 3 3 3 3 2 2 2 2 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
69,973 73,472 77,145 81,003 85,053 89,305 93,771 98,459 103,382 108,551 113,979 119,678 125,662 131,945
25,138 24,237 23,368 22,530 21,722 20,943 20,192 19,467 18,769 18,096 17,447 16,822 16,218 15,637
EPS Forecaster ($000, except per share amounts)
Company Name NETFLIX INC
Common Shares Outstanding at BS Date 52,732
Equivalent Shares at Valuation Date 52,732
Forecasted Price at Valuation Date $12.07
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
Fiscal Year of Forecast 12/31/2005 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 12/31/2029
Net Income 18,400 62,038 76,216 85,641 87,191 79,483 83,457 87,630 92,011 96,612 101,442 106,514 111,840 117,432 123,304 129,469 135,942 142,740 149,877 157,370 165,239 173,501 182,176 191,285 200,849
Common Equity Issued (Repurchased) 29,336 17,607 21,365 8,146 (16,886) (52,216) (54,827) (57,568) (60,446) (63,469) (66,642) (69,974) (73,473) (77,147) (81,004) (85,054) (89,307) (93,772) (98,461) (103,384) (108,553) (113,981) (119,680) (125,664) (131,947)
Forecasted Price at Year End $13.08 $14.38 $15.82 $17.40 $19.15 $21.06 $23.17 $25.48 $28.03 $30.83 $33.92 $37.31 $41.04 $45.14 $49.66 $54.62 $60.09 $66.09 $72.70 $79.97 $87.97 $96.77 $106.44 $117.09 $128.80
New Shares Issued (Repurchased) 2,243 1,224 1,350 468 (882) (2,479) (2,367) (2,259) (2,156) (2,058) (1,965) (1,876) (1,790) (1,709) (1,631) (1,557) (1,486) (1,419) (1,354) (1,293) (1,234) (1,178) (1,124) (1,073) (1,024)
Shares Outstanding at End of Year 54,975 56,200 57,550 58,018 57,136 54,656 52,290 50,030 47,874 45,816 43,851 41,975 40,185 38,476 36,845 35,287 33,801 32,382 31,028 29,735 28,501 27,323 26,199 25,126 24,101
Forecast EPS $0.34 $1.12 $1.34 $1.48 $1.51 $1.42 $1.56 $1.71 $1.88 $2.06 $2.26 $2.48 $2.72 $2.99 $3.27 $3.59 $3.94 $4.31 $4.73 $5.18 $5.67 $6.22 $6.81 $7.45 $8.16
Consensus Analyst Forecast of EPS
Forecast Five Year Growth Rate in EPS 33%
Consensus Analyst Forecast of Growth
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Model Summary Sensitivity Analysis
Historical Data For: Forecast Horizon 10 Years
NETFLIX INC
Most Recent Fiscal Year End: 12/31/2004
This Year’s ROE (%) 10.21%
Average ROE (last five years) 977.87%
Sales Growth (last five years) #DIV/0!
Terminal Year’s ROE (%) 14.22%
Forecast Data: This Year’s Sales Growth (%) 36.40%
Forecast Horizon 5 Years
This Year’s ROE 10.21%
Terminal Year’s Sales Growth (%) 5.00%
Terminal Year’s ROE 14.22%
Cost of Equity Capital (%) 10.00%
Terminal Year’s Sales Growth 5.00%
This Year’s Forecast EPS $0.34
Estimated Price/Share $13.39
Cost of Equity Capital 10.00% assumptions on the estimated price per share. Note that the sensitivity
Valuation Date 3/1/2005 analysis uses a linear smoothing algorithm to compute ROE and Sales
Estimated Price/Share
$12.07 Growth between the current year and the terminal year, so it may
Estimated Price/Earnings Ratio 35.33 provide a different price estimate from your detailed analysis even
Estimated Market/Book Ratio 4.07 with the same key forecasting assumptions.
Quick ‘n’ Dirty Computations
5 Years 1 2 3 4 5 6 7 8 9
ROE 10.21% 11.01% 11.82% 12.62% 13.42% 14.22% 14.22% 14.22% 14.22%
Growth 36.40% 30.12% 23.84% 17.56% 11.28% 5.00% 5.00% 5.00% 5.00%
Lagged BV 156283 213170 277377 343503 403823 449374 471843 495435 520206
Earnings 18868 27017 36682 47146 57243 65496 68771 72210 75820
Residual Income 3239 5700 8944 12796 16860 20559 21587 22666 23799
PV Residual Income 2945 4711 6720 8740 10469 11605 11077 10574 10093
PV Term. Residual Income 127062
PV 20Y Residual Income 161830
PV Residual Income 288892
Equity Value 445175
Equity Value at Current Date 475354
Less Contingent Claims 0
Adjusted Value 475354
Price/Share 9.014521506
10 Years 1 2 3 4 5 6 7 8 9
ROE 10.21% 10.61% 11.01% 11.42% 11.82% 12.22% 12.62% 13.02% 13.42%
Growth 36.40% 33.26% 30.12% 26.98% 23.84% 20.70% 17.56% 14.42% 11.28%
Lagged BV 156283 213170 284070 369632 469359 581254 701574 824770 943702
PV Residual Income 504826
Equity Value 661109
Equity Value at Current Date 705927
Less Contingent Claims 0
Adjusted Value 705927
Shares Out. 52,732
Growth 36.40% 34.83% 33.26% 31.69% 30.12% 28.55% 26.98% 25.41% 23.84%
Lagged BV 156283 213170 287417 383012 504389 656310 843687 1071314 1343535
Earnings 18868 26066 35581 47985 63925 84114 109304 140252 177676
Residual Income 3239 4749 6839 9683 13486 18483 24935 33121 43323
PV Residual Income 2945 3925 5138 6614 8374 10433 12796 15451 18373
PV Term. Residual Income 985583
PV 20Y Residual Income 480111