Netflix (NFLX) AI Stock Analysis

• Market Cap: $536.33B
• Dividend Yield: N/A
• Average Volume (3M): 2.82M
• Price to Earnings (P/E): 59.1
• Beta (1Y): 1.21
• Revenue Growth: 14.11%
• EPS Growth: 47.22%
• Country: US
• Employees: 14,000
• Sector: Communication Services
• Sector Strength: 84
• Industry: Entertainment
• EPS (TTM): 7.19
• Shares Outstanding: 425,571,260
• 10 Day Avg. Volume: 2,678,218
• 30 Day Avg. Volume: 2,815,164
• PEG Ratio: 8.59
• Price to Book (P/B): 22.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 71.46
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 3.55
• Enterprise Value/Gross Profit: 28.82
• Enterprise Value/Ebitda: 5.34
• 1Y Price Target: $1,345.47
• Price Target Upside: 7.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 36

• Rating: 79 Outperform
• Price Target: $1,462.00 ▲(16.93%Upside)

Netflix exhibits strong financial performance and positive earnings outlook, driving a high overall score. The bullish technical indicators support near-term positive momentum, though the high P/E ratio suggests potential overvaluation risks. Strategic investments and leadership changes bolster long-term growth potential, but operating margin pressures could pose challenges.

Positive Factors

AI Integration

Netflix is an AI beneficiary for both content creation and cost savings, which creates a multi-year opportunity for increased operating income.

Long-term Position

Netflix is a key component of any subscriber must-have list or bundle, indicating a strong long-term position.

Subscriber and Earnings Momentum

Netflix shares will be fueled by continued positive subscriber and earnings momentum in addition to evolving advertising and live opportunities.

Negative Factors

Advertiser Base

Netflix advertising growth exceeds 50% year-over-year, though their advertiser base remains primarily large brand advertisers.

Aggressive Estimates

Street estimates are seen as aggressive on UCAN revenue and overall operating income, with anticipated upside potentially being more muted.

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 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 demonstrates strong financial health with consistent revenue and profit growth, efficient cost management, and robust cash flow generation. The balance sheet is stable with manageable leverage, though further debt reduction could strengthen the financial position. The company's financial performance reflects effective management and a solid foundation for future growth.

Income Statement

Netflix's income statement shows a strong performance with a consistent upward trend in revenues and profits. The TTM figures indicate a Gross Profit Margin of 46.87% and a Net Profit Margin of 23.08%, reflecting high profitability. Revenue Growth Rate is robust at 2.93% (TTM), with a notable improvement from the previous year. EBIT and EBITDA margins at 27.64% and 56.61% respectively, indicating efficient operations. Overall, the company exhibits strong revenue growth and profitability.

Balance Sheet

The balance sheet highlights a solid financial position with a Debt-to-Equity Ratio of 0.63, showcasing moderate leverage. The Equity Ratio stands at 46.13%, indicating a stable capital structure. Return on Equity is strong at 38.57%, reflecting efficient utilization of shareholder funds. While the leverage is manageable, further reduction could enhance financial stability.

Cash Flow

Cash flow analysis reveals strong cash generation with an Operating Cash Flow to Net Income Ratio of 0.86, indicating efficient cash conversion. Free Cash Flow Growth Rate is 7.58% (TTM), showing robust cash flow growth. The Free Cash Flow to Net Income Ratio of 0.80 indicates good free cash flow relative to profits, supporting liquidity and potential for reinvestment.

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	24.88B	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: 1250.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 1250.31 is below the 20-day moving average (MA) of 1272.41, above the 50-day MA of 1223.24, and above the 200-day MA of 979.82, indicating a neutral trend. The MACD of 11.89 indicates Positive momentum. The RSI at 49.32 is Neutral, neither overbought nor oversold. The STOCH value of 32.04 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
FOXA	81 Outperform	$23.93B	13.83	16.89%	0.97%	15.70%	26.73%
NFLX	79 Outperform	$536.33B	59.08	40.84%	―	14.11%	47.22%
DIS	78 Outperform	$213.90B	24.30	8.75%	0.84%	5.33%	431.28%
ROKU	73 Outperform	$13.09B	―	-4.34%	―	17.30%	81.72%
Sector *	61 Neutral	$40.89B	-1.56	-12.05%	3.97%	2.10%	-69.66%
WBD	60 Neutral	$29.76B	―	-27.69%	―	-5.58%	-254.85%
PARA	58 Neutral	$9.16B	―	-28.56%	1.54%	-4.50%	-898.86%

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.

Reed Hastings Transitions to Netflix Chairman Role

On April 11, 2025, Reed Hastings announced his transition from an executive officer role to Chairman of the Board, effective April 17, 2025, while Timothy Haley decided not to seek re-election as a director. In Q1 2025, Netflix reported a 13% increase in revenue and a 27% rise in operating income year-over-year, driven by membership growth and higher pricing. The company successfully launched its ad tech platform in the US and plans further expansion. Netflix remains optimistic about its 2025 content slate and aims to sustain revenue growth and expand its operating margin.