Netflix (NFLX) AI Stock Analysis

• Market Cap: $487.76B
• Dividend Yield: N/A
• Average Volume (3M): 3.59M
• Price to Earnings (P/E): 48.9
• Beta (1Y): 1.22
• Revenue Growth: 14.28%
• EPS Growth: 46.86%
• Country: US
• Employees: 14,000
• Sector: Communication Services
• Sector Strength: 79
• Industry: Entertainment
• EPS (TTM): 7.19
• Shares Outstanding: 424,926,360
• 10 Day Avg. Volume: 3,501,284
• 30 Day Avg. Volume: 3,585,374
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 14.17
• Enterprise Value/Gross Profit: 29.23
• Enterprise Value/Ebitda: 20.89
• 1Y Price Target: $1,395.19
• Price Target Upside: 21.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 37

• Rating: 75 Outperform
• Price Target: $1,360.00 ▲(18.48% Upside)

Netflix's overall stock score is driven by its strong financial performance and positive earnings call, offset by a high valuation and mixed technical signals. The company's strategic focus on content and advertising supports future growth, but valuation concerns and technical volatility suggest cautious optimism.

Positive Factors

Advertising Revenue

Management is still on track for ad revenue to double in 2025.

Financial Performance

Revenue growth of 17% YoY was driven by higher subscription revenue due to a strong content slate and flexible pricing of subscription plans.

Subscriber Growth

Solid content drives subscriber growth with robust net additions in 2Q25, driven by a compelling content line-up.

Negative Factors

Operating Expenses

2025 EPS estimate moves modestly lower, as now higher back-half operating expense growth is assumed driven by the firm’s continued investment in its ad platform.

Stock Recommendation

The recommendation is downgraded from NEUTRAL to SELL, due to the recent share price rally.

Valuation Concerns

Premium valuation, broader market outperformance, and a quieter catalyst path may weigh on shares.

Netflix Business Overview & Revenue Model

Company Description

Netflix, Inc. (NFLX) is a leading global streaming entertainment service provider, operating in the media and entertainment sector. The company offers a vast library of TV series, documentaries, and feature films across a wide variety of genres and languages. Netflix is available in over 190 countries and provides its content on demand via the internet to televisions, computers, and mobile devices. In addition to licensing programs from various networks, Netflix has increasingly focused on producing its own original content, often branded as Netflix Originals, to differentiate its service and attract a diverse subscriber base.

How the Company Makes Money

Netflix primarily makes money through a subscription-based revenue model. It offers various subscription plans that provide users with access to its streaming library, with pricing tiers based on factors such as video quality (SD, HD, or Ultra HD) and the number of simultaneous streams allowed. The majority of Netflix's revenue comes from monthly fees paid by subscribers who gain unlimited access to the company's content library. Additionally, Netflix invests heavily in producing original content, which not only helps in retaining existing subscribers but also attracts new ones. While Netflix licenses content from other studios and producers, the ownership and distribution of original content help Netflix control costs and gain long-term value from its investments. The company does not rely on advertising revenue, which is a significant differentiator from many competitors in the streaming and traditional television landscape.

Netflix Financial Statement Overview

Summary

Netflix showcases strong financial health, with significant revenue and profit growth, efficient cost management, and effective cash flow generation. The income statement is robust, but the balance sheet indicates moderate leverage, suggesting room for improvement in debt management.

Income Statement

Netflix's income statement shows robust growth and profitability. The gross profit margin for TTM is 48.5%, indicating efficient cost management. The net profit margin stands at 24.6%, with a strong trajectory of revenue growth at 6.9% compared to the previous year. EBIT and EBITDA margins are impressive at 29.5% and 42.4% respectively, reflecting effective operational profitability. The company demonstrates strong revenue growth and profitability metrics, positioning it well within the entertainment industry.

Balance Sheet

The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.58, showing moderate leverage. The return on equity (ROE) for TTM is 41.1%, highlighting high profitability relative to equity. An equity ratio of 47.0% indicates a balanced capital structure. While the company maintains a healthy equity position, there is room for improvement in managing debt levels to further optimize financial stability.

Cash Flow

Netflix's cash flow statement reveals a strong ability to generate cash, with a free cash flow growth rate of 22.8% over the previous year. The operating cash flow to net income ratio is 0.89, signifying efficient cash conversion. The free cash flow to net income ratio is also favorable at 0.83, indicating substantial cash flow generation relative to profits. The company exhibits robust cash flow performance, supporting its growth and operational needs effectively.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	39.00B	33.72B	31.62B	29.70B	25.00B
Gross Profit	17.96B	14.01B	12.45B	12.37B	9.72B
EBITDA	26.31B	21.51B	20.33B	19.04B	15.51B
Net Income	8.71B	5.41B	4.49B	5.12B	2.76B
Balance Sheet
Total Assets	53.63B	48.73B	48.59B	44.58B	39.28B
Cash, Cash Equivalents and Short-Term Investments	9.58B	7.14B	6.06B	6.03B	8.21B
Total Debt	17.99B	16.97B	16.93B	18.12B	18.51B
Total Liabilities	28.89B	28.14B	27.82B	28.74B	28.22B
Stockholders Equity	24.74B	20.59B	20.78B	15.85B	11.07B
Cash Flow
Free Cash Flow	6.92B	6.93B	1.62B	-131.97M	1.93B
Operating Cash Flow	7.36B	7.27B	2.03B	392.61M	2.43B
Investing Cash Flow	-2.18B	541.75M	-2.08B	-1.34B	-505.35M
Financing Cash Flow	-4.07B	-5.95B	-664.25M	-1.15B	1.24B

Netflix Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1147.87
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NFLX, the sentiment is Neutral. The current price of 1147.87 is below the 20-day moving average (MA) of 1208.29, below the 50-day MA of 1230.48, and above the 200-day MA of 1012.89, indicating a neutral trend. The MACD of -23.55 indicates Positive momentum. The RSI at 36.11 is Neutral, neither overbought nor oversold. The STOCH value of 17.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NFLX.

Netflix Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOXA	81 Outperform	$23.54B	11.18	19.96%	0.98%	15.70%	26.73%
NFLX	75 Outperform	$487.76B	48.92	43.55%	―	14.28%	46.86%
DIS	73 Outperform	$212.71B	24.17	11.01%	0.86%	5.00%	144.65%
ROKU	70 Outperform	$12.32B	―	-2.47%	―	17.32%	87.79%
PARA	66 Neutral	$8.17B	―	-0.11%	1.70%	-1.75%	99.73%
WBD	57 Neutral	$31.47B	―	-27.69%	―	-5.58%	-254.85%
Sector *	55 Neutral	HK$63.39B	-0.67	-4.21%	5.33%	-2.16%	-18.87%

Netflix Corporate Events

Netflix Appoints Elinor Mertz to Board of Directors

On June 22, 2025, Elinor Mertz was appointed to the Netflix Board of Directors and the Audit Committee, while Leslie Kilgore transitioned to chair the Compensation Committee. The appointment of Mertz, who has a strong background in finance from her tenure at Airbnb and previous roles at Netflix, is expected to enhance the company’s strategic vision and innovation efforts. Concurrently, the Board rejected Jay Hoag’s resignation despite his low attendance in 2024, citing his valuable contributions and commitment to the Board’s activities.

The most recent analyst rating on (NFLX) stock is a Buy with a $1040.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.

Netflix Board Member Jay Hoag Offers Resignation

On June 5, 2025, Netflix held its annual stockholders meeting where several key proposals were voted on. Notably, Jay Hoag did not receive a majority of votes for his re-election to the board, prompting him to offer his resignation, which is under consideration by the Nominating and Governance Committee. The appointment of Ernst & Young LLP as the independent registered public accounting firm was ratified, and executive officer compensation was approved. However, several non-binding stockholder proposals, including those related to climate transition planning and amendments to the Code of Ethics, were not approved.

The most recent analyst rating on (NFLX) stock is a Buy with a $850.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.