NetFlix Inc
NFLX
$98.66
+3.25%
Netflix Inc is a leading global streaming entertainment service. It holds a dominant position with the largest subscriber base in its industry, leveraging a vast content library and a focus on on-demand episodic television, movies, and documentaries.
NFLX
NetFlix Inc
$98.66
Related headlines
Investment Opinion: Should I buy NFLX Today?
Based on a synthesis of the data, the objective assessment leans towards a 'Hold' rating for NFLX. The company's underlying fundamentals are exceptionally strong, featuring dominant scale, double-digit revenue growth, and robust cash generation. However, these positives appear largely reflected in the current stock price, as indicated by elevated valuation multiples like a forward P/E of 25.0 and a PEG ratio of 1.33. The stock has already rallied from recent lows, and significant near-term upside may be limited without flawless execution on advertising, content, and subscriber metrics. Therefore, while the long-term story remains compelling, the current risk-reward profile suggests waiting for a more attractive entry point or clearer signs of accelerated growth.
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NFLX 12-Month Price Forecast
The AI assessment is neutral based on conflicting signals: superb business fundamentals are counterbalanced by a full valuation and competitive threats. The probability-weighted outlook suggests modest upside to the base case target, but with high volatility likely to persist.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on NetFlix Inc's 12-month outlook, with a consensus price target around $128.26 and implied upside of +30.0% versus the current price.
Average Target
$128.26
27 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
27
covering this stock
Price Range
$79 - $128
Analyst target range
Wall Street analyst coverage for Netflix is substantial, with 27 analysts providing estimates. The consensus estimates for future performance include an average EPS of $6.04 and average revenue of $74.07 billion. Recent institutional ratings from firms like Oppenheimer, CFRA, and JP Morgan are predominantly positive, with actions including 'Outperform', 'Buy', and 'Overweight' upgrades, indicating a bullish analyst sentiment.
Bulls vs Bears: NFLX Investment Factors
Netflix presents a classic growth-at-a-price scenario. Its fundamental business is strong with dominant scale, robust revenue growth, and impressive profitability. However, the stock carries significant valuation and competitive risks, reflected in its recent volatility and high multiples. The investment thesis hinges on the company's ability to justify its premium valuation through sustained execution.
Bullish
- Strong Revenue Growth: Q4 2025 revenue grew 17.6% YoY, demonstrating robust top-line expansion.
- Dominant Market Position: Largest global streaming subscriber base with over 300 million users.
- Excellent Profitability & Cash Flow: High net margin of 20.1% and strong FCF of $9.46B TTM.
- Positive Analyst Sentiment: 27 analysts show bullish consensus with upgrades like 'Outperform' and 'Buy'.
Bearish
- High Valuation Multiples: Trailing P/E of 36.1 and Price/Sales of 8.78 are elevated.
- Intense Competition: Faces strong rivals like Disney+ which is rapidly becoming profitable.
- Subscriber Growth Pressure: Recent price hikes test pricing power and could impact retention.
- Volatile Stock Performance: Down 17.3% over 6 months, 28% below 52-week high, showing high beta of 1.71.
NFLX Technical Analysis
The stock has experienced significant volatility over the past six months, declining 17.29% from its level around October 2025 to its current price of $96.15. However, recent performance shows a notable recovery, with the stock up 2.55% over the last three months and 5.67% year-to-date, significantly outperforming the broader market (SPY) which is down 4.63% over the same periods. The current price sits approximately 28.4% below its 52-week high of $134.115 and about 28.2% above its 52-week low of $75.01, indicating it is in the lower-middle portion of its annual range. The 1-month relative strength of +5.16% suggests recent outperformance despite a slight 1-month price decline of -0.94%.
Beta
1.71
1.71x market volatility
Max Drawdown
-43.4%
Largest decline past year
52-Week Range
$75-$134
Price range past year
Annual Return
+5.5%
Cumulative gain past year
| Period | NFLX Return | S&P 500 |
|---|---|---|
| 1m | +1.0% | -3.6% |
| 3m | +8.4% | -4.0% |
| 6m | -14.5% | -2.0% |
| 1y | +5.5% | +16.2% |
| ytd | +8.4% | -3.8% |
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NFLX Fundamental Analysis
Revenue growth remains robust, with Q4 2025 revenue of $12.05 billion representing a 17.61% year-over-year increase. Profitability is strong, with a net margin of 20.07% for the quarter, though this has moderated from higher levels earlier in the year (e.g., 28.21% in Q2 2025). The company maintains a solid financial position with a debt-to-equity ratio of 0.54 and a current ratio of 1.19, supported by substantial free cash flow of $9.46 billion over the trailing twelve months. Operational efficiency is highlighted by a high return on equity of 41.26% and a return on assets of 15.25%, indicating effective use of shareholder capital and assets.
Quarterly Revenue
$12.1B
2025-12
Revenue YoY Growth
+0.17%
YoY Comparison
Gross Margin
+0.45%
Latest Quarter
Free Cash Flow
$9.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NFLX Overvalued?
Given the company's positive net income, the primary valuation metric is the P/E ratio. Netflix trades at a trailing P/E of 36.11 and a forward P/E of 24.95, based on current earnings and analyst estimates. The PEG ratio of 1.33 suggests the stock may be fairly valued relative to its earnings growth expectations. Other valuation metrics appear elevated, with a Price/Sales ratio of 8.78 and an EV/EBITDA of 13.29. Peer comparison data is not available in the provided inputs.
PE
36.1x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 13x~594x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.3x
Enterprise Value Multiple
Investment Risk Disclosure
Netflix's primary risk is its elevated valuation (P/E 36.1, PEG 1.33), which leaves little room for operational missteps or growth deceleration. Intensifying competition, particularly from Disney's rapidly profitable streaming segment, threatens market share and could pressure subscriber growth and pricing power. The company's recent price increases serve as a direct test of consumer elasticity; failure to retain subscribers would undermine revenue growth. Furthermore, the stock exhibits high volatility (beta 1.71) and has experienced a significant drawdown, indicating sensitivity to market sentiment and growth stock rotations. Execution risks in scaling its advertising business and managing content spending efficiently are ongoing concerns. While the balance sheet is solid (D/E 0.54), the high absolute valuation multiples themselves represent a key risk factor if earnings growth fails to meet lofty expectations.
FAQ
Key risks include valuation compression if growth slows, given its high P/E of 36.1. Intense competition from rivals like Disney+ threatens subscriber growth and pricing power. Recent price hikes test customer loyalty and could impact retention. The stock is also volatile, with a beta of 1.71, and is down 17.3% over six months, making it sensitive to broader market sentiment towards growth stocks.
The 12-month outlook presents a base case target range of $105 to $125 (probability 50%), aligning with analyst consensus and a forward P/E near 25x on estimated EPS of $6.04. A bull case (30% probability) could see a return to the 52-week high of $134+ if execution excels. A bear case (20% probability) risks a retest of the 52-week low near $75 if growth disappoints. The overall stance is neutral.
NFLX appears fairly valued to slightly overvalued based on traditional metrics. Its trailing P/E of 36.1 is high, though the forward P/E of 25.0 is more reasonable given growth expectations. The PEG ratio of 1.33 suggests the stock is priced in line with its earnings growth rate. Elevated multiples like Price/Sales of 8.78 indicate the market is pricing in continued premium execution, leaving little margin for error.
NFLX is a 'Hold' based on current data. The company's strong fundamentals, including 17.6% revenue growth and a 41.3% ROE, are compelling. However, its valuation is high with a forward P/E of 25.0 and a PEG ratio of 1.33, suggesting the stock is fairly priced. New investors might wait for a better entry point or more evidence of accelerated growth from its advertising segment.
NFLX is more suitable for long-term investors who can tolerate volatility. Its strong market position and cash flow generation support a long-term growth story. However, short-term trading is challenged by high volatility (beta 1.71) and valuation sensitivity. The stock's recent 17.3% six-month decline and sharp recovery highlight this volatility, making it a risky short-term hold without a strong stomach for price swings.