Netflix (NFLX)
Communication Services · $299B market cap · SEC CIK 0001065280
fundamentals score out of 100
Next reports on Oct 20, 2026, after the close, with analysts expecting $0.84 in earnings per share.
The case for NFLX
- Earns 48% back on shareholder equity.
- Generated $9.5B of free cash flow in FY2025, 21% of revenue.
- 28% of revenue drops through to net profit.
- Revenue growing 16.0% year over year.
- Earnings per share up 35.3%.
- A PEG of 0.62: a P/E of 21.9× is low for EPS growing 35%.
The case against
- Down 40.2% over the past year.
- Near the bottom of its 52-week range, 42% below the high. Falling prices usually have a reason; find it first.
- Swings harder than the market (beta 1.60).
- Value is weak (42/100): 21.9× earnings, 6.2× sales, 3.2% free-cash yield.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Communication Services companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 42 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 77 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 83 |
| Momentumhow the price has behaved lately | 19 |
| Stabilityhow violently it moves, what it owes and what it pays you | 42 |
- Each factor except momentum is half fixed thresholds, half rank among the 19 Communication Services companies.
Key numbers
| Price / earnings | 21.9× |
|---|---|
| Price / book | 9.86× |
| Price / sales | 6.2× |
| Revenue growth (YoY) | +16.0% |
| EPS growth (YoY) | +35.3% |
| Gross margin | 49% |
| Operating margin | 35% |
| Net margin | 28% |
| Return on equity | 48% |
| Debt / equity | 0.47× |
| Current ratio | 1.14 |
| Dividend yield | none |
| Beta | 1.60 |
| 52-week range | $65.08 – $124.86 |
| Position in that range | 12% of the way up |
| 3-month return | -5.2% |
| 1-year return | -40.2% |
Five years of financials, as filed
Pulled from Netflix's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $45.2B | $39.0B | $33.7B | $31.6B | $29.7B |
| Operating income | $13.3B | $10.4B | $7.0B | $5.6B | $6.2B |
| Net income | $11.0B | $8.7B | $5.4B | $4.5B | $5.1B |
| Operating cash flow | $10.1B | $7.4B | $7.3B | $2.0B | $393M |
| Capital expenditure | $688M | $440M | $349M | $408M | $525M |
| Total assets | $55.6B | $53.6B | $48.7B | $48.6B | $44.6B |
| Total liabilities | $29.0B | $28.9B | $28.1B | $27.8B | $28.7B |
| Shareholder equity | $26.6B | $24.7B | $20.6B | $20.8B | $15.8B |
| Cash | $9.0B | $7.8B | $7.1B | $5.1B | $6.0B |
| Long-term debt | $13.5B | $13.8B | $14.1B | $14.4B | $14.7B |
| Free cash flow | $9.5B | $6.9B | $6.9B | $1.6B | -$132M |
| Operating margin | 29.5% | 26.7% | 20.6% | 17.8% | 20.9% |
| Net margin | 24.3% | 22.3% | 16.0% | 14.2% | 17.2% |
| Diluted shares | 4.3B | 4.4B | 4.5B | 4.5B | 4.6B |
Share count is down 4.6% over 4 years. Buybacks have been shrinking the pie. Counts are restated for stock splits so the years compare.
What Netflix says it does
ABOUT US Netflix, Inc. ("Netflix", the "Company", "registrant", "we", or "us") is one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members' experience by offering compelling content that delights them and attracts new members. We aim to offer a range of pricing plans, including our ad-supported subscription plan, to meet a variety of consumer needs. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable. BUSINESS…
Risk factors NFLX lists in its 10-K
- If our efforts to attract and retain members are not successful, our business will be adversely affected
- If we do not continuously provide value to our members, including making improvements to our service in a manner that is favorably received by them, our revenue, results of operations and business will be adversely affected
- Changes in competitive offerings for entertainment video could adversely impact our business
- We face risks, such as unforeseen costs and potential liability in connection with content we acquire, produce, license and/or distribute through our service
- If we are not able to manage change and growth, our business could be adversely affected
- Our business could be adversely impacted by costs and challenges associated with strategic acquisitions and investments
- We rely upon a number of partners to make our service available on their devices
- We are subject to payment processing risk
- If government regulations relating to the internet or other areas of our business change, we may need to alter the manner in which we conduct our business, or incur greater operating expenses
- We are engaged in legal proceedings that could cause us to incur unforeseen expenses and could occupy a significant amount of our management's time and attention
- Our advertising offering is subject to various risks and uncertainties, which may adversely affect our business
- Risks Related to Intellectual Property
- If studios, content providers or other rights holders refuse to license streaming content or other rights upon terms acceptable to us, our business could be adversely affected
- Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our technology, business processes, and content