Netflix, Inc.NFLX
NMS • Communication Services
$68.69
P/E
21.27
PEG
2.42
FCF Yield
3.3%
Rev Growth YoY
+13.4% YoY
Gross Margin
51.9%
Health Score
7/10
D/E Ratio
0.47
Confidence
MEDIUM
Business Snapshot
Netflix operates a global streaming entertainment service, monetising subscribers through monthly membership fees across a library of original and licensed film and television content. It competes in the highly competitive streaming and entertainment market, where it holds a leading scale position among subscription video-on-demand providers. With a market capitalisation of $286.02B, it sits firmly in large-cap territory, generating TTM revenue of $48.37B and TTM net income of $13.65B. The defining characteristic of the business is its content spend and global subscriber base, which create a scale advantage in content amortisation and pricing power that smaller rivals struggle to replicate.
Financial Health
Gross margin stands at 51.9%, unchanged from the prior year's 51.9%, indicating stable content cost economics, while net margin (TTM) of 28.2% reflects strong bottom-line conversion. The balance sheet is conservative, with a debt/equity ratio of 0.47x and a current ratio of 1.14x, suggesting adequate short-term liquidity and modest leverage...
Risk Assessment
- VALUATION — P/E of 21.27x exceeds the sector benchmark of 17.3x, a premium that requires sustained growth to justify.
- EARNINGS QUALITY — 0 of 4 recent quarters beat estimates, a credibility concern for management's guidance.
- REVENUE DECELERATION — QoQ revenue growth of 2.5% is well below the 13.4% YoY rate, signalling a slowing sequential trend.
- 52-WEEK POSITION — the current price of $68.69 sits well below the 52-week high of $124.86, and below the midpoint of the range at approximately $94.97.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- FCF / CASH BURN — FCF yield of 3.3% is modest, and the $9.46B free cash flow must support a $286.02B market cap and content reinvestment.
- VALUATION DIVERGENCE — the Python DCF estimate of $41.81 diverges sharply from the current price of $68.69, a 64% premium that highlights model uncertainty....
Gross margin stands at 51.9%, unchanged from the prior year's 51.9%, indicating stable content cost economics, while net margin (TTM) of 28.2% reflects strong bottom-line conversion. The balance sheet is conservative, with a debt/equity ratio of 0.47x and a current ratio of 1.14x, suggesting adequate short-term liquidity and modest leverage. Free cash flow of $9.46B is solidly positive, translating to an FCF yield of 3.3% on the $286.02B market cap, and return on equity of 49.5% signals highly efficient use of shareholder capital. Overall, the company generates meaningful cash, carries manageable debt, and retains capacity for content reinvestment or shareholder returns without obvious dilution risk. The main caveat is that the current ratio of 1.14x leaves only a thin cushion above 1.0x, so short-term obligations are covered but not lavishly.
- VALUATION — P/E of 21.27x exceeds the sector benchmark of 17.3x, a premium that requires sustained growth to justify. - EARNINGS QUALITY — 0 of 4 recent quarters beat estimates, a credibility concern for management's guidance. - REVENUE DECELERATION — QoQ revenue growth of 2.5% is well below the 13.4% YoY rate, signalling a slowing sequential trend. - 52-WEEK POSITION — the current price of $68.69 sits well below the 52-week high of $124.86, and below the midpoint of the range at approximately $94.97. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - FCF / CASH BURN — FCF yield of 3.3% is modest, and the $9.46B free cash flow must support a $286.02B market cap and content reinvestment. - VALUATION DIVERGENCE — the Python DCF estimate of $41.81 diverges sharply from the current price of $68.69, a 64% premium that highlights model uncertainty.
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