Why Netflix's Financial Position Is Strong and Getting Stronger

Netflix (NASDAQ: NFLX) is the perfect coronavirus stock for several reasons. It has a huge global growth opportunity, it is seeing increased demand from so many currently housebound consumers around the world, and it's also well-insulated from recessionary conditions because of the service's low price point and strong value proposition.

Skeptics say the company has a weak balance sheet and point out its negative free cash flow. But both items are misunderstood. In fact, the company's financial situation is strong and improving in this environment. Here's why.

Netflix had $14.8 billion of long-term debt on its books at the end of last year. That's not a trivial amount of debt for any company, let alone for Netflix, which only had $2.6 billion of operating income last year. So it's understandable why some may think that's a precarious financial position.

Source Fool.com