Netflix, Inc.NFLX
NASDAQ • Communication Services
$89.33
P/E
28.27
PEG
0.34
FCF Yield
2.5%
Rev Growth YoY
+16.2% YoY
Gross Margin
51.9%
Health Score
8/10
D/E Ratio
0.54
Confidence
MEDIUM
Business Snapshot
Netflix is a global leader in subscription-based streaming entertainment, generating revenue primarily from monthly membership fees across its ad-supported and ad-free tiers. Operating within the highly competitive entertainment sector, it holds a dominant position with over 300 million subscribers worldwide, commanding significant scale and bargaining power with content producers. As a large-cap company with a market capitalisation of $377.50 billion and trailing twelve-month revenue of $46.89 billion, Netflix possesses substantial financial resources to invest in original content and global expansion. Its defining characteristic is a powerful network effect—the larger its subscriber base, the greater its ability to amortise content costs and attract top-tier talent, creating a self-reinforcing competitive moat.
Financial Health
Gross margin improved to 51.9% from 45.9% in the prior year, while net margin reached 28.5%, reflecting strong operating leverage and pricing power. The balance sheet is healthy, with a debt-to-equity ratio of 0.54x and a current ratio of 1.19x, indicating ample liquidity to cover short-term obligations...
Risk Assessment
- VALUATION — P/E of 28.27x exceeds the sector average of 22x, leaving limited margin for error if growth slows or interest rates remain elevated.
- EARNINGS QUALITY — The company beat analyst estimates in 0 out of 4 recent quarters, raising concerns about forecast reliability and business predictability.
- REVENUE DECELERATION — Sequential revenue growth of 1.7% is significantly slower than the 16.2% year-over-year pace, suggesting near-term demand may be tapering.
- TECHNICALS — Price trades below the 200-day moving average of $102.43 and a death cross (50-day below 200-day) has occurred, confirming a bearish trend.
- VALUATION DIVERGENCE — The two DCF estimates differ by over 150% ($119.75 vs. $47.82), indicating extreme model uncertainty and wide possible valuation ranges.
- 52-WEEK POSITION — Current price of $89.33 sits 33.4% below the 52-week high of $134.115 and below the midpoint of the annual range, reflecting significant recent weakness....