One-glance verdict
Within fair range
$55.25 our estimate vs market $77.65
Wall Street consensus: $113.94 (106.2% higher than our fair-value estimate)
41% above our estimate
Fundamentals snapshot
Netflix, Inc.
NFLX · NMS · Communication Services · Entertainment
Current price
$77.65
52-week range
$70.86 - $129.50
Market cap
$326.97B
Balance sheet
Healthy
17.16x Strong cushion
Net debt $4.45B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 3.8% last year.
- Reward Returns 48.5% on equity, ahead of 83% of its peers.
- Reward Free cash flow was positive in 5/10 years.
- Risk Insider ownership is only 0.6% (peer median: 4.2%).
What this company does
Netflix, Inc.
Netflix is a streaming service that sells monthly subscriptions for watching TV shows, movies, and games on internet-connected devices. The company's money comes almost entirely from these membership fees, creating a predictable and steady stream of what's called recurring revenue (income that comes in consistently, like a monthly bill). This reliable cash flow is important because it allows Netflix to spend billions on creating new and exclusive content to attract more subscribers and keep its current ones from canceling.
How the company got here
Netflix was founded in 1997 by Reed Hastings and Marc Randolph, starting as a service that let people rent DVDs by mail. Instead of paying for each rental, customers could pay a flat monthly fee to get unlimited DVDs, which was a new idea at the time. In 2007, the company made a huge shift by introducing streaming, allowing people to watch movies and shows instantly over the internet. This change set the stage for Netflix to become a global entertainment giant, moving from mailing physical discs to creating its own award-winning original shows and movies.
What it actually does
Netflix is a subscription service that lets you watch a wide variety of TV shows, movies, documentaries, and more on almost any device with an internet connection, like your TV, phone, or computer. You pay a monthly fee to access a huge library of content from around the world, including their own 'Netflix Originals' that you can't find anywhere else. The service is known for being on-demand, meaning you can watch what you want, whenever you want, without commercials on most plans.
Streaming Subscriptions
This is the main way Netflix makes money, accounting for the vast majority of its business. Customers pay a recurring monthly fee, called a subscription, to access the library of movies and TV shows. There are different price levels, or tiers; paying more might get you higher video quality or the ability for more people in your household to watch on different screens at the same time. This model provides the company with a steady and predictable stream of income, also known as revenue (the total money a company brings in from sales).
Advertising
A newer but rapidly growing part of the business is its lower-priced subscription plan that includes commercials. To attract customers who are more sensitive to price, Netflix offers a cheaper monthly plan that shows a few minutes of ads per hour. Companies pay Netflix to show their ads to the millions of people watching on this plan, creating a second major source of income for the company. This part of the business is expanding quickly, with a large percentage of new sign-ups choosing the ad-supported option.
Games
Netflix has also moved into the world of mobile and cloud-based video games, which are included with a regular subscription at no extra cost. The goal isn't necessarily to make money directly from the games themselves, but to keep subscribers engaged and entertained so they continue paying their monthly fee. By offering games based on popular shows or well-known characters, Netflix hopes to add more value to its service and give people another reason to stick around.
What management is betting on now
Netflix's leadership is focused on a few key areas to keep the company growing. A major priority is expanding its ad-supported subscription plan to attract more customers globally and build a strong advertising business. They are also investing heavily in creating their own original content—movies, series, and live programming—in many different languages to appeal to diverse tastes worldwide. Finally, the company is exploring new forms of entertainment like video games and live events to keep users engaged on the platform for longer.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$1.21B
FY2024 Q3
$2.19B
FY2024 Q4
$1.38B
FY2025 Q1
$2.66B
FY2025 Q2
$2.27B
FY2025 Q3
$2.66B
FY2025 Q4
$1.87B
FY2026 Q1
$5.09B
Revenue
$12.25B
Net income
$5.28B
Diluted EPS
1.23
Operating cash flow
$5.29B
Free cash flow
$5.09B
Fetching…
Sources
Revenue
$12.05B
Net income
$2.42B
Diluted EPS
-17.14
Operating cash flow
$2.11B
Free cash flow
$1.87B
Fetching…
Sources
Revenue
$11.51B
Net income
$2.55B
Diluted EPS
5.87
Operating cash flow
$2.83B
Free cash flow
$2.66B
Fetching…
Sources
Revenue
$11.08B
Net income
$3.13B
Diluted EPS
7.19
Operating cash flow
$2.42B
Free cash flow
$2.27B
Fetching…
Sources
Revenue
$10.54B
Net income
$2.89B
Diluted EPS
6.61
Operating cash flow
$2.79B
Free cash flow
$2.66B
Fetching…
Sources
Revenue
$10.25B
Net income
$1.87B
Diluted EPS
4.27
Operating cash flow
$1.54B
Free cash flow
$1.38B
Fetching…
Sources
Revenue
$9.82B
Net income
$2.36B
Diluted EPS
5.40
Operating cash flow
$2.32B
Free cash flow
$2.19B
Fetching…
Sources
Revenue
$9.56B
Net income
$2.15B
Diluted EPS
4.88
Operating cash flow
$1.29B
Free cash flow
$1.21B
Fetching…
Sources
Is it cheap or expensive?
Fair value $55.25 vs current price $77.65
Wall Street consensus is the average analyst price target: $113.94 (106.2% higher than our fair-value estimate).
Our most-likely fair value is $55.25 a share — about 28.8% away from today's price of $77.65, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net debt $4.5B. Interest coverage 17.2x.
Net debt
$4.45B
Interest coverage
17.16x
Netflix, Inc.'s profit covers its interest bill about 17.2 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
NFLX
BASELINE
Netflix, Inc.
Total debt $16.74B Interest coverage 17.16x This is the baseline the peer rows are being compared against.
Total debt $47.36B Interest coverage 7.63x -56% vs NFLX Carries about 2.2x less debt cushion than NFLX.
Total debt $32.47B Interest coverage 0.63x -96% vs NFLX Carries about 27.3x less debt cushion than NFLX.
Total debt $94.61B Interest coverage 4.69x -73% vs NFLX Carries about 3.7x less debt cushion than NFLX.
Total debt $544.44M Interest coverage 70.90x +313% vs NFLX Carries about 4.1x more debt cushion than NFLX.
Total debt $122.13B Interest coverage 4.92x -71% vs NFLX Carries about 3.5x less debt cushion than NFLX.
What you should know
The case for and against NFLX
3 Rewards
1 Risk
Rewards
-
Revenue grew 3.8% last year.
-
Returns 48.5% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
-
Insider ownership is only 0.6% (peer median: 4.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
25.05x
Forward P/E
20.20x
P/B
10.51x
P/S
6.97x
EV/EBITDA
23.21x
PEG ratio
1.53x
Profitability
How much profit each dollar creates
Gross margin
49.0%
Operating margin
32.3%
Net margin
28.5%
ROE
48.5%
ROA
15.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.54x
Current ratio
1.41x
Quick ratio
1.18x
Total debt
$16.74B
Total cash
$12.29B
Growth
How the business has been compounding
Revenue TTM
$46.89B
Revenue 5Y CAGR
11.1%
EPS TTM
3.10
EPS 5Y CAGR
36.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$12.65B
Free CF TTM
$9.46B
FCF margin
20.2%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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