Critical Comparison: Netflix (NASDAQ:NFLX) and Cinemark (NYSE:CNK)

Cinemark (NYSE:CNK) and Netflix (NASDAQ:NFLX) are both communication services companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cinemark and Netflix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cinemark	0	6	9	0	2.60
Netflix	1	15	35	4	2.76

Cinemark currently has a consensus target price of $37.93, indicating a potential upside of 4.27%. Netflix has a consensus target price of $94.70, indicating a potential upside of 34.71%. Given Netflix’s stronger consensus rating and higher possible upside, analysts plainly believe Netflix is more favorable than Cinemark.

Earnings & Valuation

This table compares Cinemark and Netflix”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cinemark	$3.12 billion	1.35	$138.20 million	$1.69	21.52
Netflix	$45.18 billion	6.48	$10.98 billion	$3.18	22.11

Netflix has higher revenue and earnings than Cinemark. Cinemark is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cinemark	6.44%	50.94%	4.88%
Netflix	28.22%	40.02%	19.81%

Risk and Volatility

Cinemark has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Netflix has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Institutional and Insider Ownership

80.9% of Netflix shares are owned by institutional investors. 2.4% of Cinemark shares are owned by insiders. Comparatively, 1.2% of Netflix shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Netflix beats Cinemark on 13 of the 15 factors compared between the two stocks.

About Cinemark

Cinemark Holdings, Inc., together with its subsidiaries, engages in the motion picture exhibition business. As of February 16, 2024, it operated 501 theatres with 5,719 screens in 42 states and 13 countries in South and Central America. Cinemark Holdings, Inc. was founded in 1984 and is headquartered in Plano, Texas.

About Netflix

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