Netflix, Inc. (NFLX)
Fair ValueFundamental
73
Price
$69.58
Market Cap
$298.64B
Part 1 · What the company is worth
Overview
Netflix produces and licenses TV shows and films and streams them to paying members over the internet, with no physical discs or theatres involved. It operates worldwide, offering the same core service everywhere but adapting price, local-language content and, in most markets, an ad-supported cheaper tier to fit what each region can pay.
How it makes money
Nearly all revenue comes from monthly membership fees, so growth depends on adding subscribers and raising prices without pushing them to cancel. A smaller and growing slice comes from advertising sold against the cheaper ad-supported plan. Content costs are largely fixed once a show is made, so each additional subscriber watching it adds revenue at very little extra cost, which is why profitability rises faster than the subscriber count.
Revenue by segment
The largest and most mature region, with the highest price per member of anywhere Netflix operates.
The second-largest region by revenue, growing faster than UCAN as membership and pricing both climb.
A mature but lower-priced market for Netflix, with membership growth now the main lever left for revenue.
The smallest region but the fastest-growing, now matching Latin America in revenue for the first time.
Competitive moat
Scale · NarrowNetflix's largest advantage is spreading a multi-billion-dollar content budget across roughly 300 million paying households, letting it outbid smaller streamers for content while charging a comparatively modest monthly fee. That scale is real but not permanent: well-funded rivals with their own content libraries — Disney, Amazon, Apple — can and do compete for the same subscribers and the same shows.
What drives demand
DefensiveA monthly streaming subscription is a small, discretionary expense that most members keep even when tightening their budget elsewhere, which has made Netflix's subscriber base historically resilient through downturns. The bigger swing factor is not the economy but whether the current content slate is strong enough to keep people from cancelling.
Key risks
- Content and sports rights costs — Netflix is bidding against deep-pocketed rivals for the same films, series and live sports rights. Rising content costs, including a growing push into live events, pressure margins if they outpace subscriber and price growth.
- Streaming competition — Disney+, Amazon Prime Video, Apple TV+ and others compete for the same subscription budget and the same viewing hours, and several bundle streaming with other services Netflix cannot match.
- Currency exposure — With most subscribers now outside the United States, revenue and reported earnings move with exchange rates in ways management does not fully control.
- Slowing subscriber growth in mature markets — UCAN and EMEA are large, penetrated markets where most of the future growth Netflix needs must come from price increases and advertising rather than new members, both of which have limits.
The case for
Buyers argue that Netflix's global scale and content budget remain unmatched among pure streamers, that the ad-supported tier and password-sharing crackdown opened new avenues for revenue without needing endless subscriber growth, and that margins still have room to expand as the business matures.
The case against
Sellers fear that subscriber growth in the largest, most profitable markets is running out of room, that content and live-sports costs keep climbing as competitors bid for the same titles, and that a business built on discretionary spending is more exposed to a downturn than its recent history suggests.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 19, 2026 with claude-haiku-4-5 — shared with all users
Disney+ and Hulu sell the same monthly subscription to the same households Netflix targets, and both companies bid against each other for films, series and sports rights.
Prime Video competes for the same viewing hours and the same advertising budgets worldwide, and its studio arm bids for the same content and talent as Netflix.
HBO Max is the closest rival on premium scripted series, the segment Netflix built its brand on, and remains a separate listed company while the Paramount Skydance purchase is held up in court.
YouTube takes more U.S. television viewing time than any streaming service, so it competes directly for the leisure hours and the ad money Netflix wants.
Paramount+ and the free service Pluto TV chase the same subscribers and the same ad-supported viewers, with sports rights as the main lever.
Peacock puts NBCUniversal films and live sports in front of the same U.S. households, and Comcast's cable television business competes for the same entertainment spending.
Balance Sheet & Liquidity
Revenue
$48.37B
Trailing 12 months (through 6/30/2026)
Net Income
$13.65B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$9.46B
Total Equity
$26.62B
Total Liabilities
$28.98B
Current Ratio
1.14
Interest Coverage
16.94
Debt/EBITDA
2.27
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$78.51
Current Price
$69.58
Margin of Safety
+11.4%
Fair Value Range
$51.03 - $105.99
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
21.88
ROE
41.3%
P/B Ratio
9.61
P/FCF
25.98
Gross Margin
49.1%
ROIC
24.5%
Profitability Radar
Value Creation (Economic Moat)
ROIC
24.5%
WACC
12.3%
ROIC − WACC
+12.2 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (22)
- EPS shows upward trend
- EPS CAGR 5.47%
- Price CAGR 19.15%
- ROIC 24.5%
- Gross Margin 49.1%
- P/FCF 25.98
- Debt/Equity ratio
- Operating Margin 29.7%
- Positive Free Cash Flow
- CapEx intensity
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Return on Tangible Assets
- ROE 48.0%
- Revenue Growth 5Y 12.6%
- Analyst Consensus 74% Buy
- PEG Ratio 0.66
- Earnings Quality (OCF/NI) 0.88
- Share Dilution -1.4%
- Net Margin Trend 28.2% vs 24.6%
- Piotroski F-Score 7/9
Failed (5)
- P/B Ratio 9.61
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Earnings Surprise avg -7.1%
Unavailable (1)
- Dividend Payout NaN%
Piotroski F-Score
Strong financial health
Earnings Quality
Moderate: some gap between profits and cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Theodore A. Sarandos | Co-CEO, President & Director | 60 |
| Mr. Gregory K. Peters | Co-CEO, President & Director | 54 |
| Mr. Spencer Adam Neumann | Chief Financial Officer | 55 |
| Mr. David Hyman J.D. | Chief Legal Officer & Secretary | 59 |
| Mr. Clete Willems | Chief Global Affairs Officer | 45 |
| Ms. Natalie Gutteridge | VP of Corporate Legal & Operations | - |
| Mr. Jeffrey William Karbowski | Chief Accounting Officer | 46 |
| Ms. Elizabeth Stone | Chief Product & Technology Officer | - |
| Mr. Spencer Wang | Vice President of Finance, Corporate Development & Investor Relations | - |
| Ms. Dani Dudeck | Chief Communications Officer | - |
Audit Risk
10
Board Risk
3
Compensation Risk
6
Shareholder Rights Risk
5
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-01-23
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-07-17
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-07-30
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for NFLX, sourced from Markets Gazette.
- 2d agoPOSITIVEHere’s what Netflix skeptics are getting wrong about the stock, according to an analyst
Deutsche Bank analysts are challenging skepticism surrounding Netflix stock, arguing that investors are overly focused on domestic market saturation and are consequently overlooking significant growth opportunities internationally. The firm suggests that expanding subscriber bases and revenue streams in emerging markets are not being adequately priced into the current valuation. This perspective implies that Netflix's global reach and diversified revenue model provide a more robust growth narrative than commonly perceived, potentially leading to a reassessment of its future earnings potential and stock performance.
- 9d agoNEGATIVENetflix: azioni in calo, HSBC cita YouTube e calo del coinvolgimento
Netflix shares fell 2% on Tuesday following an downgrade by HSBC, which cited increasing competition from Alphabet's YouTube and concerns over viewer engagement. HSBC downgraded Netflix to Neutral from Buy, slashing its price target from $96 to $76. The firm highlighted YouTube's growing share of US television viewing, suggesting a near-term rebound in Netflix engagement is less likely. YouTube has captured a record 14.2% of TV time, posing a significant challenge to Netflix's market position and future growth prospects.
- 13d agoNEGATIVEDow apre in calo di 90 punti mentre Buffett si dimette, azioni Netflix -5%
Netflix shares plunged 5% in early trading following news of Warren Buffett's resignation from the company's board. While the broader US markets opened mixed, with the Dow Jones Industrial Average down 93 points, the S&P 500 flat, and the Nasdaq Composite up 0.33%, the significant drop in Netflix stock highlights investor reaction to the departure of a prominent figure. This move comes after a volatile week where markets experienced a sharp rebound on Thursday, driven by falling Treasury yields and cooling inflation data, but the specific news regarding Netflix appears to be a strong negative catalyst for its shares.
- 17d agoPOSITIVEAzioni Netflix in rialzo dopo che Evercore alza il target a $110
Netflix shares surged approximately 4.3% following Evercore ISI's upward revision of its price target to $110 from $100, maintaining an 'Outperform' rating. This new target suggests a potential 42% upside from Netflix's prior closing price. Evercore cited improving subscriber trends in the US and Japan, alongside growth avenues in live events, short-form content, and advertising. Analyst Kutgun Maral highlighted that Netflix's US penetration has reached a multi-year high of 63%. For investors, this indicates strong market positioning and potential for continued growth.
- 8/13/2026POSITIVEBill Ackman once exited his Netflix stake in a huff. He’s buying the streaming giant again, as well as these five stocks.
Prominent investor Bill Ackman, through his hedge fund Pershing Square, has re-entered a significant position in Netflix Inc. This move comes after a previous exit, signaling a renewed conviction in the streaming giant's prospects. Pershing Square has acquired stakes in five other undisclosed stocks over the past six months, indicating a broader strategic shift or rebalancing within Ackman's portfolio. The re-investment in Netflix suggests Ackman believes the company's valuation has become attractive, potentially driven by anticipated subscriber growth, content strategy adjustments, or improved profitability metrics. Investors will monitor Netflix's upcoming earnings reports for confirmation of these positive trends.
- 7/20/2026NEUTRALNetflix Returns to the High-Grade Bond Market After 2024 Debut
Netflix Inc. is returning to the US high-grade bond market, marking its first issuance since its debut two years ago. This move comes amid increasing investor scrutiny driven by slowing sales growth. The company aims to raise capital, but the timing and context suggest a potentially challenging environment for debt issuance. Investors will be watching the terms of the bond offering closely to gauge market appetite and Netflix's financial strategy in response to its growth trajectory.
via Markets Gazette