Netflix (NFLX) AI Stock Analysis

• Market Cap: $329.50B
• Dividend Yield: N/A
• Average Volume (3M): 46.34M
• Price to Earnings (P/E): 32.7
• Beta (1Y): 1.19
• Revenue Growth: 15.49%
• EPS Growth: 35.54%
• Country: US
• Employees: 14,000
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 0.56
• Shares Outstanding: 4,222,162,000
• 10 Day Avg. Volume: 35,648,564
• 30 Day Avg. Volume: 46,340,828
• PEG Ratio: 1.33
• Price to Book (P/B): 14.90
• Price to Sales (P/S): 8.78
• P/FCF Ratio: 41.91
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 7.88
• Enterprise Value/Gross Profit: 16.24
• Enterprise Value/Ebitda: 11.76
• 1Y Price Target: $114.55
• Price Target Upside: 38.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 37
• EPS Forecast (FY): 3.13
• Revenue Forecast (FY): $51.16B

• Rating: 69 Neutral
• Price Target: $96.00 ▲(16.08% Upside)
• Action: Downgraded Date: 01/21/26
• Date: Action: Downgraded 01/21/26

The score is driven primarily by strong financial performance and a constructive earnings outlook (revenue growth and margin expansion guidance, plus accelerating advertising). These positives are meaningfully tempered by weak technical momentum (below major moving averages with negative MACD) and a relatively high P/E with no dividend support.

Positive Factors

High Profitability Margins

Sustained high gross and net margins indicate durable unit economics from subscription and original content scale. Strong margins support continued reinvestment in originals, ad tech, and strategic initiatives while preserving operating leverage and resilience through demand cycles.

Strong Cash Generation

Consistent free cash flow growth and near-par conversion of net income to FCF provide structural funding for content investment, M&A, and debt service. Reliable cash conversion improves financial flexibility and reduces dependence on equity financing over a multi-quarter horizon.

Material Content Scale from WBD Deal

Owning Warner Bros.’ studios, franchises and library would materially expand Netflix’s content assets and production capacity, strengthening competitive advantages in exclusive IP and reducing reliance on external licensing. Scale can lower content costs per viewer and enhance long-term subscriber retention.

Negative Factors

Regulatory Approval Risk (EU)

Deep regulatory scrutiny in the EU is a durable execution risk for the WBD acquisition. Protracted review, imposed remedies, or conditional approvals could limit integration benefits, delay synergies, or require asset divestitures, reducing the strategic upside over many quarters.

Increased Leverage and Covenants

Large new debt facilities to finance the merger increase leverage and introduce covenants that can constrain capital allocation. Higher fixed interest and repayment commitments could pressure free cash flow available for content, product investment, and strategic optionality in weaker macro or subscriber scenarios.

Execution Risk in Live Events Expansion

Operational difficulties producing reliable live events highlight execution risk as Netflix expands into sports and real-time programming. Sustained success requires tech, rights, and operational investment; failures could harm engagement and reduce the long-term return on higher-cost live content initiatives.

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 internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services in the United States. The company has approximately 222 million paid members in 190 countries. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.

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 of screens that can stream simultaneously and the availability of high-definition content. Additionally, Netflix invests significantly in producing original content, which attracts and retains subscribers, thereby driving revenue growth. The company also benefits from strategic partnerships with smart TV manufacturers, mobile carriers, and other platforms that increase its visibility and subscriber base. While advertising revenue has been introduced in recent years through ad-supported subscription tiers, the core of Netflix's revenue remains its subscription fees.

Netflix Financial Statement Overview

Summary

Strong overall fundamentals supported by high profitability (net margin 24.05%), solid revenue growth (TTM +4.04%), and efficient cash conversion (operating CF/net income 0.98; FCF/net income 0.94). Balance sheet is healthy with manageable leverage (debt-to-equity 0.62) and strong ROE (41.86%), though leverage tied to expansion remains a watch item.

Income Statement

Netflix has demonstrated strong revenue growth with a 4.04% increase in TTM, supported by robust gross and net profit margins of 48.09% and 24.05%, respectively. The EBIT and EBITDA margins are also impressive at 29.69% and 66.91%, indicating efficient operational management. The consistent revenue growth trajectory and high profitability margins highlight Netflix's strong market position and operational efficiency.

Balance Sheet

The balance sheet reflects a healthy financial structure with a debt-to-equity ratio of 0.62, showing a manageable level of leverage. The return on equity is notably high at 41.86%, indicating effective use of shareholder funds to generate profits. The equity ratio stands at 47.26%, suggesting a solid equity base relative to total assets. Overall, Netflix maintains a stable financial position with strong returns, though there is room for improvement in reducing debt levels.

Cash Flow

Netflix's cash flow performance is strong, with a 5.48% growth in free cash flow, indicating effective cash management. The operating cash flow to net income ratio is 0.98, and the free cash flow to net income ratio is 0.94, both reflecting efficient conversion of income into cash. The positive cash flow growth and high conversion ratios underscore Netflix's ability to generate and manage cash effectively.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 82.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 82.7 is above the 20-day moving average (MA) of 80.03, below the 50-day MA of 86.51, and below the 200-day MA of 110.37, indicating a neutral trend. The MACD of -2.47 indicates Negative momentum. The RSI at 51.84 is Neutral, neither overbought nor oversold. The STOCH value of 48.63 is Neutral, 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
NFLX	69 Neutral	$329.50B	32.73	42.76%	―	15.49%	35.54%
DIS	69 Neutral	$187.87B	15.62	11.65%	1.10%	3.61%	152.34%
FOXA	68 Neutral	$22.80B	13.47	16.87%	0.75%	14.91%	9.30%
WBD	68 Neutral	$72.29B	154.05	1.36%	―	-4.29%	―
ROKU	64 Neutral	$12.93B	160.57	3.43%	―	16.61%	83.98%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
PSKY	50 Neutral	$11.47B	-38.94	-1.90%	1.48%	-0.48%	97.09%

Netflix Corporate Events

Netflix Revises Warner Bros. Acquisition Into All-Cash Deal

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 set to receive shares in Discovery Global after its planned spin-off. The revised structure, unanimously approved by both boards, is financed through a larger $42.2 billion bridge facility alongside cash and existing credit lines, is designed to increase value certainty for WBD shareholders, accelerate a stockholder vote now targeted by April 2026, and preserve Netflix’s balance sheet while it absorbs WBD’s retained streaming and studios business; the transaction, expected to close 12–18 months after the original 2025 agreement, remains subject to regulatory approvals, completion of the Discovery Global separation, and WBD stockholder approval, and would significantly expand Netflix’s production capacity and competitive position in global film and television.

The most recent analyst rating on (NFLX) stock is a Buy with a $125.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.

Netflix Secures Major Financing Facilities for Warner Merger

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 revolving credit facility that can be drawn for the cash portion of the merger purchase price, related transaction fees, refinancing of certain existing debt, and general corporate purposes, with flexible borrowing, prepayment and maturity extension options and interest rates linked to Netflix’s credit rating. On the same date, Netflix also secured a total of $20 billion in senior unsecured delayed draw term loan facilities, split between two- and three-year tranches, likewise earmarked primarily for funding the merger consideration and related expenses, and carrying rating-based pricing and standard financial covenants, including a minimum interest coverage ratio; together, these new facilities meaningfully de-risk the merger financing, improve funding visibility, and reduce reliance on more expensive bridge commitments for Netflix and its stakeholders.

The most recent analyst rating on (NFLX) stock is a Buy with a $125.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.

Netflix Announces Acquisition of Warner Bros. Discovery

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 combine Netflix’s streaming capabilities with Warner Bros.’ extensive library and franchises, enhancing Netflix’s content offerings and strengthening its position in the entertainment industry. The transaction, which is expected to close in 12-18 months, will provide more choice and value for consumers, create opportunities for the creative community, and generate significant shareholder value.

The most recent analyst rating on (NFLX) stock is a Buy with a $152.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.

Netflix Announces Ten-for-One Stock Split Amendment

On October 30, 2025, Netflix announced a ten-for-one forward stock split of its issued common stock. The company filed an amendment on November 14, 2025, to increase the number of authorized shares from 4.99 billion to 49.9 billion, effective immediately. Trading on a split-adjusted basis is set to begin on November 17, 2025, which may impact the company’s stock liquidity and market accessibility for investors.

The most recent analyst rating on (NFLX) stock is a Buy with a $1350.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.

Netflix Amends Executive Compensation Plans

On October 30, 2025, Netflix‘s Board of Directors approved amendments to the compensatory arrangements for its executive officers, effective January 1, 2026. These changes include modifications to the Executive Officer Severance Plan and adjustments to restricted stock unit and performance-based restricted stock unit awards. The amendments expand the conditions under which executives can receive severance, enhance retirement vesting criteria, and redefine qualifying termination conditions, potentially impacting the company’s executive retention and compensation strategy.

The most recent analyst rating on (NFLX) stock is a Buy with a $1350.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.

Netflix Announces Ten-for-One Stock Split

On October 30, 2025, Netflix announced a ten-for-one forward stock split approved by its Board of Directors. This move aims to make the company’s stock more accessible to employees participating in its stock option program. Shareholders of record as of November 10, 2025, will receive nine additional shares for each share held, with split-adjusted trading commencing on November 17, 2025.

The most recent analyst rating on (NFLX) stock is a Hold with a $1199.00 price target. To see the full list of analyst forecasts on Netflix stock, see the NFLX Stock Forecast page.