Netflix, Inc.
NFLX
$79.59
-0.69%
Netflix, Inc. is the world's leading streaming entertainment service, offering a vast library of TV series, films, and documentaries to over 300 million subscribers globally, operating primarily in the Entertainment industry. As the dominant pure-play streaming platform, Netflix has redefined media consumption and maintains a significant competitive moat through its global scale, original content, and brand recognition. Currently, the stock is under intense scrutiny as it trades near 52-week lows, with investors debating the impact of intensifying competition from traditional media and tech giants, the success of its ad-supported tier, and its expansion into live programming and gaming, all while the company continues to generate record revenue and robust free cash flow.…
NFLX
Netflix, Inc.
$79.59
Related headlines
Investment Opinion: Should I buy NFLX Today?
Based on the analysis, the recommendation is a Buy. The thesis is that Netflix's strong revenue growth, robust free cash flow, and reasonable forward valuation make it an attractive long-term investment despite near-term competitive pressures. The analyst consensus is Buy with an average target of $94.04, implying 20.3% upside from the current price of $78.16.
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NFLX 12-Month Price Forecast
The AI assessment is bullish with medium confidence. Netflix's strong fundamentals, including accelerating revenue growth and robust free cash flow, support a positive outlook. The forward P/E of 20.5x is attractive relative to growth, and the analyst consensus is Buy. However, the high beta and competitive pressures introduce uncertainty, warranting medium confidence. The stance would be upgraded to high confidence if revenue growth accelerates above 20% or if the stock breaks above its 50-day moving average. It would be downgraded to neutral if revenue growth falls below 10% or if the forward P/E exceeds 25x.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Netflix, Inc.'s 12-month outlook, with a consensus price target around $93.42 and implied upside of +17.4% versus the current price.
Average Target
$93.42
0 analysts
Implied Upside
+17.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$70 - $135
Analyst target range
The target price range spans from a low of $70.00 to a high of $135.00, representing a wide spread of $65, which reflects significant uncertainty about Netflix's future prospects. The low target of $70 suggests concerns about competitive pressures and margin compression, while the high target of $135 implies expectations of successful execution in new initiatives like advertising and live content. Recent institutional ratings have been mostly reaffirmations of existing Buy or Overweight ratings, with no downgrades, indicating that analysts remain confident in the long-term story. The wide range highlights the market's divergent views on Netflix's ability to sustain growth in a maturing streaming market.
Bulls vs Bears: NFLX Investment Factors
Netflix presents a classic value-versus-growth debate. The bull case rests on accelerating revenue growth, robust free cash flow, and a reasonable forward P/E of 20.5x, suggesting the market is pricing in substantial earnings growth. The bear case highlights the stock's severe underperformance, competitive threats, and premium valuation on trailing metrics. Currently, the evidence slightly favors the bulls given the strong fundamentals and analyst upside, but the key tension is whether Netflix can sustain double-digit revenue growth and margin expansion in the face of intensifying competition. If growth decelerates below 10% or margins compress, the stock could face further downside, while successful execution in advertising and live content could drive a re-rating.
Bullish
- Revenue growth accelerating to 16.2%: Q1 2026 revenue hit $12.25 billion, up 16.2% YoY, accelerating from 10.5% growth in Q1 2025. This shows Netflix's ability to grow despite market saturation, driven by subscriber gains and price increases.
- Forward P/E of 20.5x is attractive: With a forward P/E of 20.5x versus trailing 36.3x, the market expects significant EPS growth. Analyst estimates of $6.44 EPS for the next fiscal year imply a PEG of 1.34, suggesting reasonable valuation relative to growth.
- Robust free cash flow of $11.9B: TTM free cash flow stands at $11.89 billion, providing ample resources for content investment, buybacks, and strategic initiatives. This financial flexibility supports long-term growth and shareholder returns.
- Strong profitability metrics: Net margin is 24.3%, operating margin 29.5%, and ROE is 41.3%. These metrics demonstrate Netflix's efficient monetization of its content library and subscriber base, well above industry averages.
Bearish
- Stock down 36.5% in one year: NFLX has underperformed the S&P 500 by 56.9% over the past year, with a 1-year price change of -36.5%. This reflects intense competitive pressures and investor skepticism about future growth.
- High valuation vs. peers: Trailing P/E of 36.3x and P/S of 8.8x are premium to the broader market. Despite the drop, the stock still trades at a significant premium, leaving room for multiple compression if growth disappoints.
- Q3 guidance below expectations: Recent Q2 results were solid, but Q3 guidance missed estimates, causing a 9% after-hours drop. This suggests near-term growth may be slowing, and the market is punishing any signs of deceleration.
- Intense competition from YouTube and traditional media: YouTube's ad revenue reached $11.06 billion, approaching Netflix's total revenue. Traditional media companies are also ramping up streaming, increasing content costs and subscriber acquisition challenges.
NFLX Technical Analysis
Netflix is in a pronounced downtrend, with the stock price at $78.16 as of August 14, 2026, reflecting a 36.5% decline over the past year. The current price sits at approximately 62% of its 52-week range (between $65.08 low and $126.71 high), indicating that the stock is closer to its lows than its highs, which typically suggests bearish sentiment and potential value or a falling knife scenario. The 1-year price change of -36.5% starkly contrasts with the S&P 500's +20.4% gain over the same period, highlighting significant underperformance and a relative strength of -56.9%.
Beta
1.51
1.51x market volatility
Max Drawdown
-47.0%
Largest decline past year
52-Week Range
$65-$127
Price range past year
Annual Return
-34.0%
Cumulative gain past year
| Period | NFLX Return | S&P 500 |
|---|---|---|
| 1m | +16.1% | +2.5% |
| 3m | -10.2% | +2.7% |
| 6m | +1.2% | +11.1% |
| 1y | -34.0% | +20.5% |
| ytd | -12.5% | +12.3% |
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NFLX Fundamental Analysis
Netflix's revenue growth remains robust, with Q1 2026 revenue of $12.25 billion, up 16.2% year-over-year, and a clear acceleration from the 10.5% growth seen in Q1 2025. The company has consistently grown revenue over the past eight quarters, from $9.56 billion in Q2 2024 to $12.25 billion in Q1 2026, driven by subscriber growth and price increases. The streaming segment is the primary revenue driver, contributing $9.82 billion in the most recent quarter, and the ad-supported tier is gaining traction, though specific segment data is limited. This growth trajectory underscores Netflix's ability to monetize its content and expand its user base, despite increasing competition.
Quarterly Revenue
$12.2B
2026-03
Revenue YoY Growth
+16.2%
YoY Comparison
Gross Margin
51.9%
Latest Quarter
Free Cash Flow
$11.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NFLX Overvalued?
Given that Netflix is highly profitable, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 36.3x, while the forward PE is 20.5x, indicating that the market expects significant earnings growth in the next year. The gap between trailing and forward PE suggests that the market is pricing in a substantial increase in EPS, which is supported by analyst estimates of $6.44 for the upcoming fiscal year. This forward multiple is more reasonable and reflects the company's strong earnings momentum.
PE
36.3x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 14x~57x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a debt-to-equity ratio of 0.54, which is manageable but not negligible, and a current ratio of 1.19, indicating adequate liquidity. The company's heavy investment in content (cost of revenue $5.89B in Q1) and rising interest expenses ($262M) could pressure margins if revenue growth slows. However, strong free cash flow of $11.9B provides a cushion, and the payout ratio of 0% means no dividend obligations, allowing reinvestment. The main financial risk is the high valuation multiple (trailing P/E 36.3x) that leaves little room for error; any earnings miss could trigger a sharp de-rating.
FAQ
The key risks are: (1) Competitive risk from YouTube and traditional media, which could slow subscriber growth; (2) Valuation risk, as the trailing P/E of 36.3x leaves little room for error; (3) Macro risk, with a beta of 1.514 making the stock sensitive to market downturns; (4) Execution risk in new initiatives like advertising and live content. The most severe risk is a prolonged subscriber decline, which could drive the stock to the 52-week low of $65.08, a 16.7% downside. However, the company's strong free cash flow provides a buffer.
The 12-month forecast is moderately bullish. In the base case (50% probability), the stock is expected to reach the analyst average target of $94.04, a 20.3% gain. In the bull case (30% probability), it could reach $135, a 72.7% gain, if growth accelerates. In the bear case (20% probability), it could fall to $70, a 10.4% loss. The most likely scenario is the base case, assuming revenue growth remains in the mid-teens and margins stay stable. The key assumption is that Netflix can maintain its competitive position and continue to grow subscribers.
NFLX is fairly valued based on forward metrics. The trailing P/E of 36.3x is high, but the forward P/E of 20.5x is more reasonable, reflecting expected earnings growth. The PEG ratio of 1.34 suggests the stock is not overvalued relative to its growth rate. Compared to the market average P/E of around 25x, NFLX's forward P/E is slightly below, indicating it is trading at a discount to its growth potential. The P/S ratio of 8.8x is premium, but this is typical for high-margin tech companies. Overall, the market is pricing in continued growth, but not at an excessive level.
Yes, NFLX is a good buy for long-term investors seeking growth. The stock is trading at $78.16, with an analyst average target of $94.04, implying 20.3% upside. The forward P/E of 20.5x is reasonable given expected EPS growth to $6.44, and the company generates strong free cash flow of $11.9B. However, the stock is volatile (beta 1.514) and faces competitive risks, so it's best for investors with a 3-5 year horizon who can tolerate short-term fluctuations. For shorter-term traders, the stock may be risky due to its recent downtrend.
NFLX is better suited for long-term investment due to its growth potential and volatility. The stock has a beta of 1.514, making it more volatile than the market, which can be challenging for short-term traders. However, the company's strong fundamentals, including 16.2% revenue growth and $11.9B free cash flow, support long-term appreciation. The stock does not pay a dividend, so investors rely on capital gains. A minimum holding period of 3-5 years is recommended to ride out short-term fluctuations and benefit from the company's growth trajectory. For short-term traders, the stock may offer opportunities but with higher risk.