NFLX PEG Ratio Analysis
Higher than 17% of Communication Services sector peers
Updated 279h ago·SEC filings & market data
Key Takeaway
Netflix’s current PEG ratio of **0.28x** means the stock’s price-to-earnings multiple is only 0.28 times its expected earnings growth rate — a very low number that often suggests the stock is undervalued relative to its growth prospects.
Sector Performance
17th percentileNFLX
0.28x
Sector Median
0.38x
Sector Avg
0.83x
Prior Period
0.29x(Jul 2026)
Deep Analysis
Netflix’s current PEG ratio of **0.28x** means the stock’s price-to-earnings multiple is only 0.28 times its expected earnings growth rate — a very low number that often suggests the stock is undervalued relative to its growth prospects.
Compared to sector peers in Communication Services, the ratio is well below the sector median of **0.37x**, placing Netflix in the **17th percentile** — meaning 83% of peers have higher PEG ratios. The metric has been **decreasing** over the last eight quarters, with a year-over-year decline of **-15.2%** and a quarter-over-quarter decline of **-3.4%**. A low PEG ratio combined with a persistent downward trend could imply that the market is pricing in slowing growth or rising risks, even though the absolute level still points to potential value. This mix of a low level but negative trajectory introduces both a possible opportunity (cheap relative to growth) and a caution (growth may be deteriorating), which aligns with the overall **NEUTRAL** verdict.
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 0.28x compares to a Communication Services sector median of 0.38x, placing it in the 17th percentile.
Who are NFLX's closest peers by PEG Ratio?
The closest Communication Services peers by PEG Ratio include: META (0.38x), GOOGL (0.33x), RDDT (0.06x), BIDU (0.77x), TWLO (0.82x).
Learn More About PEG Ratio
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.
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0.28x
Sector Median
0.38x
Sector Avg
0.83x
How NFLX's PEG Ratio compares to sector peers.
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