NFLXBULLISH

NFLX PEG Ratio Analysis

2.67x

Higher than 100% of Communication Services sector peers

Updated 1309h ago·SEC filings & market data

Key Takeaway

The PEG ratio of 2.67x divides the price-to-earnings ratio by expected earnings growth, so a higher number means you are paying more per unit of growth.

Sector Performance

100th percentile

NFLX

2.67x

Sector Median

0.77x

Sector Avg

0.94x

Prior Period

2.75x(Aug 2026)

↑ Improving

📊

Deep Analysis

The PEG ratio of 2.67x divides the price-to-earnings ratio by expected earnings growth, so a higher number means you are paying more per unit of growth.

That 2.67x is well above the sector median of 0.77x, and NFLX sits at the 100th percentile among Communication Services peers, indicating the most expensive growth valuation in the group. The metric has been increasing over the last eight quarters, though the yearly change of +6.0% contrasts with a quarterly drop of -2.9%, showing a rising but uneven path. A persistently high PEG combined with an upward trend points to elevated valuation risk, as growth expectations would need to keep accelerating to justify the price. This metric supports the overall NEUTRAL verdict: the extreme level suggests downside risk, while the recent quarterly easing provides a small offset.

Frequently Asked Questions

What does the PEG Ratio tell investors about NFLX?

The PEG ratio adjusts P/E for expected growth. A PEG below 1.0 may signal undervaluation; above 2.0 may suggest the growth story is priced in.

How is the PEG Ratio calculated?

PEG Ratio is calculated as: P/E Ratio / EPS Growth Rate.

How does NFLX's PEG Ratio compare to its sector?

NFLX's PEG Ratio of 2.67x compares to a Communication Services sector median of 0.77x, placing it in the 100th percentile.

Who are NFLX's closest peers by PEG Ratio?

The closest Communication Services peers by PEG Ratio include: BIDU (0.77x), TWLO (0.82x), META (0.38x), GOOGL (0.06x).

📚

Learn More About PEG Ratio

PEG Ratio Explained: The Metric That Fixes P/E's Biggest Flaw

P/E tells you what you're paying. PEG tells you whether it's worth it. Here's how to calculate it, interpret it, and why most investors use it wrong.

The Formula

P/E Ratio / EPS Growth Rate

Why It Matters

The PEG ratio adjusts P/E for expected growth. A PEG below 1.0 may signal undervaluation; above 2.0 may suggest the growth story is priced in.

Master NFLX's Valuation

Get the complete institutional research report covering all fundamental and technical metrics.

View full NFLX research report →

Free account — no credit card

Closest Sector Peers