Netflix (NFLX) vs. Cinedigm (CIDM) Critical Analysis

Netflix (NASDAQ: NFLX) and Cinedigm (NASDAQ:CIDM) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Insider & Institutional Ownership

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81.7% of Netflix shares are held by institutional investors. Comparatively, 8.9% of Cinedigm shares are held by institutional investors. 4.9% of Netflix shares are held by company insiders. Comparatively, 13.9% of Cinedigm shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Netflix has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Cinedigm has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Earnings & Valuation

This table compares Netflix and Cinedigm’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Netflix $11.69 billion 12.38 $558.92 million $1.25 266.94
Cinedigm $90.39 million 0.55 -$15.12 million N/A N/A

Netflix has higher revenue and earnings than Cinedigm.

Analyst Ratings

This is a summary of current ratings and recommmendations for Netflix and Cinedigm, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netflix 3 16 31 0 2.56
Cinedigm 0 0 0 0 N/A

Netflix currently has a consensus target price of $292.47, suggesting a potential downside of 12.35%. Given Netflix’s higher probable upside, research analysts plainly believe Netflix is more favorable than Cinedigm.

Profitability

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

Net Margins Return on Equity Return on Assets
Netflix 4.78% 17.20% 3.34%
Cinedigm -40.45% N/A -22.06%

Summary

Netflix beats Cinedigm on 10 of the 11 factors compared between the two stocks.

About Netflix

Netflix, Inc., an Internet television network, engages in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. It operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD. The company offers TV shows and movies, including original series, documentaries, and feature films. It offers members with the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. The company also provides DVDs-by-mail membership services. As of January 22, 2018, it had approximately 117 million members in 190 countries. Netflix, Inc. was founded in 1997 and is headquartered in Los Gatos, California.

About Cinedigm

Cinedigm Corp. is a distributor and aggregator of independent movie, television and other short form content managing a library of distribution rights to thousands of titles and episodes released across digital, physical, and home and mobile entertainment platforms. The Company also provides digital cinema assets servicing on over 12,000 domestic and foreign movie screens. It operates through four segments: first digital cinema deployment (Phase I Deployment), the second digital cinema deployment (Phase II Deployment), digital cinema services and media content and entertainment group. It collaborates with producers, brands and other content owners to market, source, curate and distribute content to targeted audiences. It distributes content through existing and emerging digital home entertainment platforms and packaged distribution of DVD and Blu-ray discs to wholesalers and retailers and mortar storefronts. It also operates a branded and curated over-the-top entertainment channels.

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