Netflix, Inc.(NFLX) - Stock detail

Netflix, Inc.

US
NFLX
Netflix, Inc.(Listing date: 05/23/2002)

Netflix, Inc. was incorporated in the State of Delaware on August 29, 1997. It is one of the world's leading entertainment service companies, offering a wide variety of TV series, films, and games across different genres and languages. Members can play, pause, and resume watching anytime, anywhere, and can change their plans at any time.

AI Value AnalystHold
Overall Rating6.3/10
Generated at:2026-06-11 17:41:42
Analysis based on 5 consecutive quarterly financial reports from 2025-03-31 to 2026-03-31. Data sources include company financial statements and market price data as of 2026-06-11 close. The analysis provides a comprehensive view of the company's recent financial performance and valuation.
Overview

Netflix, Inc. (NFLX) is a fundamentally strong global streaming leader with excellent revenue growth, explosive profit margin expansion, and world-class returns on capital. Its financial health is robust with adequate liquidity and moderate, well-managed leverage. However, the stock trades at premium valuation multiples, reflecting its strong performance but offering limited margin of safety for new investors.

Valuation
3/10
Profitability
9/10
Financial health
7/10
Operation Advice
  • Existing shareholders should hold given the company's superb underlying business performance.
  • Potential new investors should wait for a more attractive entry point, as the current price does not present a clear margin of safety.
  • A more favorable entry might be found if the price approaches the lower end of the base case range near $73.
  • Monitor upcoming quarterly results for subscriber growth, margin trends, and free cash flow generation.

Valuation

P/E TTM
29.00
P/E LYR
31.97
P/B MRQ
12.46
P/S TTM
--
AI Analysis
  • The stock is fairly valued to slightly overvalued based on standard historical multiples. Valuation metrics (P/E of 29.00, P/B of 12.46, P/S of 7.30) are elevated but supported by the company's industry-leading profitability and growth profile. The recent 25% price correction has moved the stock from severely overvalued to a more reasonable, albeit premium, valuation.
  • The stock trades at a P/E (TTM) of 29.00 and a forward-looking Dynamic P/E of 31.97.
  • Given the company's high growth rate and stellar profitability metrics, these multiples can be justified for a market leader but are elevated and imply high future growth expectations.
  • The P/B ratio of 12.46 is very high, typical for companies with significant intangible assets and extraordinarily high returns on equity.
  • The P/S (TTM) ratio of 7.30 is also premium, reflecting the market's valuation of Netflix's revenue stream and market position.
  • The stock has declined approximately 25% from a high near $108 in mid-April 2026 to the current $81.27, finding recent support in the low $80s.
  • A base case (Hold) scenario suggests a reasonable P/E (TTM) range of 26-28x, translating to a price range of $72.80 to $78.40.
  • A bull case (Buy) scenario, if the company exceeds expectations, suggests a P/E (TTM) of 30-32x and an upside target range of $84.00 to $89.60.
  • At $81.27, the stock is trading near the top end of the Base Case range and within the lower bound of the Bull Case range, indicating it is fairly valued to slightly overvalued.
Valuation trend

Profitability

ROE TTM
49.21%
Net margin
43.13%
Gross margin
51.93%
Total revenue
12.25B
AI Analysis
  • Netflix demonstrates exceptionally strong and improving profitability, with healthy revenue growth, substantial net margin expansion, and outstanding returns on capital.
  • Revenue growth remains healthy, with Q1 2026 showing a 16.19% year-over-year increase to $12.25B.
  • A significant highlight is the substantial expansion in net profit margin, with the Q1 2026 net margin surging to 43.13%, up from 27.42% in Q1 2025.
  • This dramatic margin increase, coupled with a steady gross margin around 52%, indicates powerful operating leverage and effective cost management.
  • The returns on equity and assets are outstanding, with a Trailing Twelve Months (TTM) ROE of 49.21% and ROA of 23.70%.
  • These exceptionally high returns signal extremely efficient use of shareholder capital and corporate assets to generate profits.
Profitability
2025Q12025Q22025Q32025Q42026Q1
ROE TTM--24.21%33.78%42.76%49.21%
Earnings
2025Q12025Q22025Q32025Q42026Q1
Total revenue10.54B21.62B33.13B45.18B12.25B

Financial health

Debt/Asset
48.99%
Current ratio
1.41
Quick ratio
--
Cash ratio
1.41
AI Analysis
  • The company's financial health appears robust with adequate liquidity and moderate, well-managed leverage that supports its exceptional profitability.
  • The current ratio of 1.41 indicates sufficient short-term assets to cover short-term liabilities, suggesting adequate liquidity.
  • The debt-to-asset ratio is 48.99%, representing a moderate level of leverage for a mature, cash-generative company in the tech/media sector.
  • This level of leverage is not an immediate cause for concern.
  • The high leverage is effectively managed, as evidenced by the company's exceptional returns on equity and assets.
Leverage
2025Q12025Q22025Q32025Q42026Q1
Debt/Asset53.87%53.01%52.75%52.13%48.99%
Liquidity
2025Q12025Q22025Q32025Q42026Q1
Current ratio1.201.341.331.191.41