Analyzing Netflix (NASDAQ:NFLX) and Redbox Entertainment (NASDAQ:RDBX)

Netflix (NASDAQ:NFLXGet Rating) and Redbox Entertainment (NASDAQ:RDBXGet Rating) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

81.0% of Netflix shares are owned by institutional investors. 2.4% of Netflix shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Netflix and Redbox Entertainment’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Netflix $29.70 billion 2.72 $5.12 billion $11.02 16.49
Redbox Entertainment $288.54 million 1.55 -$112.79 million N/A N/A

Netflix has higher revenue and earnings than Redbox Entertainment.

Risk and Volatility

Netflix has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Redbox Entertainment has a beta of -2.96, indicating that its stock price is 396% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Netflix and Redbox Entertainment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netflix 6 23 10 0 2.10
Redbox Entertainment 1 2 1 0 2.00

Netflix currently has a consensus target price of $347.55, indicating a potential upside of 91.27%. Redbox Entertainment has a consensus target price of 7.00, indicating a potential downside of 28.93%. Given Netflix’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Netflix is more favorable than Redbox Entertainment.

Profitability

This table compares Netflix and Redbox Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Netflix 16.47% 32.01% 11.53%
Redbox Entertainment N/A N/A -59.93%

Summary

Netflix beats Redbox Entertainment on 12 of the 12 factors compared between the two stocks.

About Netflix (Get Rating)

Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. The company provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services in the United States. The company has approximately 222 million paid members in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.

About Redbox Entertainment (Get Rating)

Redbox Entertainment Inc. operates a network of self-service kiosks in the United States. It operates a network of approximately 38,000 self-service kiosks, where consumers could rent or purchase new-release DVDs and Blu-ray Discs. The company provides installation, merchandising, and break-fix services to other kiosk businesses. It also produces, acquires, and distributes movies through its film distribution label, Redbox Entertainment, LLC, providing rights to talent-led films that are distributed across the company's services, as well as through third party digital services. In addition, the company offers transactional and ad-supported digital streaming services, which include Redbox On Demand, a transactional service that provides digital rental or purchase of new release and catalog movies and TV content; Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand; and Redbox Free Live TV, an ad-supported television service giving access to approximately 100 linear channels. The company is based in Oakbrook Terrace, Illinois.

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