Netflix (NFLX)
NASDAQ:NFLX
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Netflix
(NASDAQ:NFLX)
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Rating:76Outperform
Price Target:
$96.00
▼(-6.81% Downside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by strong financial performance (high margins and robust free cash flow) and a positive earnings outlook (double-digit 2026 revenue growth guidance and margin expansion). These strengths are partly offset by weaker technicals (below key moving averages with negative MACD) and a relatively high P/E with no dividend support.
Positive Factors
Strong cash generation
High and recurring operating cash flow (~$10.1B TTM) and strong free cash flow (~$9.5B TTM, growing ~5.5%) provide durable internal funding for content, product and strategic investments, lowering reliance on external financing and supporting long‑term capital allocation and resilience.
Negative Factors
Sizable absolute debt level
Despite improved leverage metrics, roughly $14.5B of absolute debt can limit strategic flexibility on big content spends or future M&A, heighten interest‑rate and refinancing exposures, and constrict the buffer if operating cash generation or margins deteriorate.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
High and recurring operating cash flow (~$10.1B TTM) and strong free cash flow (~$9.5B TTM, growing ~5.5%) provide durable internal funding for content, product and strategic investments, lowering reliance on external financing and supporting long‑term capital allocation and resilience.
Read all positive factors
Netflix (NFLX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$434.92B
Dividend YieldN/A
Average Volume (3M)44.77M
Price to Earnings (P/E)36.1
Beta (1Y)1.14
Revenue Growth15.49%
EPS Growth35.54%
CountryUS
Employees14,000
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)0.56
Shares Outstanding4,222,162,000
10 Day Avg. Volume32,664,801
30 Day Avg. Volume44,765,278
Financial Highlights & Ratios
PEG Ratio1.33
Price to Book (P/B)14.90
Price to Sales (P/S)8.78
P/FCF Ratio41.91
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue9.78
Enterprise Value/Gross Profit20.17
Enterprise Value/Ebitda14.61
Forecast
1Y Price Target
$114.84Price Target Upside11.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering40
EPS Forecast (FY)3.19
Revenue Forecast (FY)$51.33B
Netflix Business Overview & Revenue Model
Company Description
Netflix, Inc. provides entertainment services. It offers TV series, documentaries, feature films, and mobile games across various genres and languages. The company provides members the ability to receive streaming content through a host of interne...
How the Company Makes Money
Netflix generates revenue primarily through its subscription-based model, where users pay a monthly fee to access a vast library of content. The company offers several subscription tiers, each varying in price based on features such as the number ...
Netflix Key Performance Indicators (KPIs)
Any
Total Paid Memberships
Shows the total number of paying subscribers, indicating Netflix's market reach, revenue potential, and overall popularity among consumers.
Shows the total number of paying subscribers, indicating Netflix's market reach, revenue potential, and overall popularity among consumers.
Data provided by:
The Fly
The FlyNetflix Earnings Call Summary
Earnings Call Date:Jan 20, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call communicated a broadly positive outlook: management reported solid 2025 results (16% revenue growth, ~30% operating profit growth), ambitious 2026 guidance (revenue +14% to $51B and operating margin expansion to 31.5%), clear traction and explicit plans for advertising, product, games and live events, and a strategic rationale for the Warner Bros. acquisition. Challenges noted — modest aggregate view-hours growth, ad-tier ARM still below ad-free, unchanged FCF guidance, higher near-term expense growth and regulatory/integration risk around the acquisition — appear manageable relative to the scale of opportunities and the strong organic momentum described. Overall, highlights materially outweigh the lowlights.Positive Updates
Strong 2025 Financial Performance
Netflix delivered 16% revenue growth and roughly 30% operating profit growth in 2025, expanded margins, and grew key free cash flow. Advertising sales grew ~2.5x in 2025.
Negative Updates
Modest Aggregate View-Hours Growth
Total view hours growth was only ~2% in 2025 (modest acceleration vs 1% prior), reflecting that aggregate engagement is growing slowly and is influenced by shifts in plan mix and geography.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong 2025 Financial Performance
Netflix delivered 16% revenue growth and roughly 30% operating profit growth in 2025, expanded margins, and grew key free cash flow. Advertising sales grew ~2.5x in 2025.
Read all positive updates
Company Guidance
Netflix guided 2026 revenue of $51 billion (≈+14% year‑over‑year) and an operating margin target of 31.5% (≈+2 percentage points y/y, or ≈+2.5 points excluding a ~0.5‑point M&A drag); they expect content amortization to increase roughly 10% in 2026, a content cash-to‑expense ratio around 1.1x, and reiterated roughly $17 billion of cash content spend that will grow slower than revenue. Management said ad sales, which rose ~2.5× in 2025, should roughly double again in 2026 to about $3 billion, and noted 2025 results included 16% revenue growth, ~30% operating profit growth and expanding margins; free cash flow guidance is about $6 billion. Key drivers called out were membership growth, pricing, and ad scale, and they emphasized large remaining upside given Netflix is under 10% of TV time in major markets and about 7% of the addressable consumer/ad spend.Netflix Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
80
Positive
Cash Flow
88
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 45.18B | 39.00B | 33.72B | 31.62B | 29.70B |
| Gross Profit | 21.91B | 17.96B | 14.01B | 12.45B | 12.37B |
| EBITDA | 30.25B | 26.31B | 21.51B | 20.33B | 19.04B |
| Net Income | 10.98B | 8.71B | 5.41B | 4.49B | 5.12B |
Balance Sheet | |||||
| Total Assets | 55.60B | 53.63B | 48.73B | 48.59B | 44.58B |
| Cash, Cash Equivalents and Short-Term Investments | 9.06B | 9.58B | 7.14B | 6.06B | 6.03B |
| Total Debt | 14.46B | 17.99B | 16.97B | 14.35B | 18.12B |
| Total Liabilities | 28.98B | 28.89B | 28.14B | 27.82B | 28.74B |
| Stockholders Equity | 26.62B | 24.74B | 20.59B | 20.78B | 15.85B |
Cash Flow | |||||
| Free Cash Flow | 9.46B | 6.92B | 6.93B | 1.62B | -131.97M |
| Operating Cash Flow | 10.15B | 7.36B | 7.27B | 2.03B | 392.61M |
| Investing Cash Flow | 1.04B | -2.18B | 541.75M | -2.08B | -1.34B |
| Financing Cash Flow | -10.35B | -4.07B | -5.95B | -664.25M | -1.15B |
Netflix Technical Analysis
Positive
103.01
Price Trends
89.70
Positive
92.81
Positive
106.54
Negative
Market Momentum
2.75
Negative
72.67
Negative
88.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NFLX, the sentiment is Positive. The current price of 103.01 is above the 20-day moving average (MA) of 95.60, above the 50-day MA of 89.70, and below the 200-day MA of 106.54, indicating a neutral trend. The MACD of 2.75 indicates Negative momentum. The RSI at 72.67 is Negative, neither overbought nor oversold. The STOCH value of 88.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NFLX.
Netflix Risk Analysis
Netflix disclosed 23 risk factors in its most recent earnings report. Netflix reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Risks Related to Our Stock Ownership Q4, 2025
2.
Following certain periods of volatility in the market price of our securities, we became the subject of securities litigation. Q4, 2025
3.
The WBD transaction may not be completed on the currently contemplated timeline or terms, or at all. Q4, 2025
Netflix Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $434.92B | 36.11 | 43.25% | ― | 15.49% | 35.54% | |
68 Neutral | $175.68B | 21.11 | 11.35% | 1.10% | 3.61% | 152.34% | |
68 Neutral | $24.59B | 34.54 | 16.22% | 0.75% | 14.91% | 9.30% | |
64 Neutral | $15.11B | 180.68 | 3.40% | ― | 16.61% | 83.98% | |
62 Neutral | $68.05B | 98.11 | 2.05% | ― | -4.29% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
55 Neutral | $11.81B | -1.44 | -4.36% | 1.48% | -0.48% | 97.09% |
* Communication Services Sector Average
NFLX
Netflix
103.01
9.88
10.61%
PSKY
Paramount Skydance
10.62
0.10
0.94%
DIS
Walt Disney
99.17
15.44
18.44%
ROKU
Roku
102.47
42.97
72.22%
FOXA
Fox
61.02
11.96
24.37%
WBD
Warner Bros
27.44
19.42
242.14%
Netflix Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Netflix Receives Termination Fee After WBD Deal Collapse
Negative
Feb 27, 2026
On January 19, 2026, Netflix entered into an amended merger agreement under which it would have acquired a reorganized Warner Bros. Discovery entity holding the company’s Streaming Studios businesses, leaving WBD’s Global Linear Netwo...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Netflix Revises Warner Bros. Acquisition Into All-Cash Deal
Positive
Jan 20, 2026
On January 19–20, 2026, Netflix and Warner Bros. Discovery amended their merger agreement to convert Netflix’s pending acquisition of Warner Bros. into a simplified, all-cash deal valued at $27.75 per WBD share, with WBD investors also...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Netflix Secures Major Financing Facilities for Warner Merger
Positive
Dec 22, 2025
On December 19, 2025, Netflix replaced part of a previously arranged bridge financing with longer-term, lower-cost debt facilities to support its pending merger with Warner Bros. Discovery. The company entered into a $5 billion senior unsecured re...
Business Operations and StrategyM&A Transactions
Netflix Announces Acquisition of Warner Bros. Discovery
Positive
Dec 5, 2025
On December 4, 2025, Netflix announced an agreement to acquire Warner Bros. Discovery, Inc. (WBD) for a total enterprise value of $82.7 billion, following the separation of WBD’s Global Networks division. This strategic acquisition aims to c...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.