Netflix (NFLX) AI Stock Analysis

• Market Cap: $424.75B
• Dividend Yield: N/A
• Average Volume (3M): 41.56M
• Price to Earnings (P/E): 41.9
• Beta (1Y): 1.17
• Revenue Growth: 15.49%
• EPS Growth: 35.54%
• Country: US
• Employees: 14,000
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 0.59
• Shares Outstanding: 4,237,323,000
• 10 Day Avg. Volume: 43,038,597
• 30 Day Avg. Volume: 41,556,807
• PEG Ratio: 0.07
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.98
• P/FCF Ratio: 5.53
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 12.17
• Enterprise Value/Gross Profit: 25.32
• Enterprise Value/Ebitda: 18.23
• 1Y Price Target: $137.65
• Price Target Upside: 37.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 37
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $111.00 ▲(10.73% Upside)

Netflix's overall stock score is driven by its strong financial performance and positive corporate events, including a strategic acquisition and stock split. However, the high valuation and bearish technical indicators temper the score. The positive earnings call further supports Netflix's growth prospects, but market momentum remains a concern.

Positive Factors

Revenue Growth

Netflix's ability to capture record TV time shares in key markets indicates strong consumer demand and effective content strategy, supporting sustained revenue growth.

Ad Sales Expansion

The significant growth in ad sales reflects Netflix's successful diversification strategy, enhancing revenue streams beyond subscriptions and supporting long-term financial stability.

Content Success

The success of original content like 'K-Pop Demon Hunters' strengthens Netflix's brand and subscriber retention, while partnerships expand its market influence and revenue potential.

Negative Factors

Brazilian Tax Impact

The unexpected tax expense in Brazil highlights potential regulatory risks that could affect profitability and financial forecasts, necessitating careful management of international operations.

Debt Levels

While leverage is manageable, continued focus on reducing debt is crucial to enhance financial flexibility and reduce interest burden, supporting long-term growth and stability.

High Valuation Concerns

A high valuation can limit stock price appreciation potential and increase investor expectations, potentially impacting future capital raising and strategic investments.

Netflix Business Overview & Revenue Model

Company Description

Netflix, Inc. is a leading global entertainment services company that offers a wide array of films, TV shows, documentaries, and original content through its subscription-based streaming platform. Founded in 1997, Netflix operates in the digital media and entertainment sector, providing on-demand video content to millions of subscribers worldwide. With a focus on creating and distributing original programming, Netflix has positioned itself as a major player in the entertainment industry, competing with traditional television networks, cable providers, and other streaming platforms.

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

Netflix exhibits a robust financial profile with strong revenue growth, high profitability margins, and efficient cash flow management. The company maintains a healthy balance sheet with manageable leverage and high returns on equity. While Netflix's financials are strong, continued focus on reducing debt and sustaining cash flow growth will further enhance its financial stability and growth prospects.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.38B	39.00B	33.72B	31.62B	29.70B	25.00B
Gross Profit	20.86B	17.96B	14.01B	12.45B	12.37B	9.72B
EBITDA	28.97B	26.31B	21.51B	20.33B	19.04B	15.51B
Net Income	10.43B	8.71B	5.41B	4.49B	5.12B	2.76B
Balance Sheet
Total Assets	54.93B	53.63B	48.73B	48.59B	44.58B	39.28B
Cash, Cash Equivalents and Short-Term Investments	9.33B	9.58B	7.14B	6.06B	6.03B	8.21B
Total Debt	16.63B	17.99B	16.97B	16.93B	18.12B	18.51B
Total Liabilities	28.98B	28.89B	28.14B	27.82B	28.74B	28.22B
Stockholders Equity	25.95B	24.74B	20.59B	20.78B	15.85B	11.07B
Cash Flow
Free Cash Flow	8.97B	6.92B	6.93B	1.62B	-131.97M	1.93B
Operating Cash Flow	9.57B	7.36B	7.27B	2.03B	392.61M	2.43B
Investing Cash Flow	1.14B	-2.18B	541.75M	-2.08B	-1.34B	-505.35M
Financing Cash Flow	-8.95B	-4.07B	-5.95B	-664.25M	-1.15B	1.24B

Netflix Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 100.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 100.24 is below the 20-day moving average (MA) of 108.69, below the 50-day MA of 113.16, and below the 200-day MA of 113.42, indicating a bearish trend. The MACD of -2.71 indicates Positive momentum. The RSI at 34.02 is Neutral, neither overbought nor oversold. The STOCH value of 20.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NFLX.

Netflix Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOXA	77 Outperform	$28.60B	15.39	17.33%	0.80%	14.91%	9.30%
DIS	73 Outperform	$187.99B	15.37	11.78%	0.95%	3.61%	152.34%
NFLX	71 Outperform	$424.75B	41.88	42.86%	―	15.49%	35.54%
WBD	70 Outperform	$64.63B	139.02	1.36%	―	-4.29%	―
ROKU	65 Neutral	$14.79B	―	-1.09%	―	16.61%	83.98%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
PSKY	50 Neutral	$14.75B	―	-1.90%	1.50%	-0.48%	97.09%

Netflix Corporate Events

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.

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.

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.

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.