Business Description
Netflix, Inc. serves as a worldwide entertainment provider. Its comprehensive library features television series, motion pictures, documentaries, and mobile games, spanning numerous genres and languages. Members can effortlessly stream this content through a variety of internet-connected devices, including smart TVs, digital media players, cable boxes, and mobile phones. Furthermore, the company continues to offer a DVD-by-mail subscription service to its customers in the United States. With roughly 222 million paying subscribers distributed across 190 countries, Netflix was founded in 1997 and is headquartered in Los Gatos, California.
Business History
Generated: Jun 24, 2026 5:48amPrice Overview
Last updated: Jun 24, 2026 5:42am (3d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.58
Total Equity: $26.62B
Shares: 4,317,144,000
Total Debt: $14.46B
Cash: $9.03B
EBITDA: $30.25B
Total Debt: $14.46B
Cash: $9.03B
Revenue: $45.18B
Revenue: $45.18B
Revenue: $45.18B
Total Equity: $26.62B
Tax Rate: 13.7%
Equity: $26.62B
Total Debt: $14.46B
Cash: $9.03B
Current Liabilities: $10.98B
Long-Term Debt: $13.46B
Total Debt: $14.46B
Total Equity: $26.62B
Shares: 4,317,144,000
Shares: 4,317,144,000
CapEx: -$688.22M
Shares: 4,317,144,000
Stock Price: $73.21
Net Income: $10.98B
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
The trajectory is exceptional: revenue grew from $29.7B (2021) to $45.2B (2025), a ~11% CAGR, while operating margin expanded from 20.9% to 29.5% and gross margin from 41.6% to 48.5%. Net income more than doubled from $5.1B to $11.0B, and FCF flipped from -$132M in 2021 to $9.46B in 2025 - classic operating leverage as the content amortization base stabilized and password-sharing/ad-tier monetization layered on. Altman Z of 9.09 and a clean Beneish M (-2.16) corroborate that the reported numbers are real.ns Capital discipline is equally strong. Diluted shares shrank from 4.55B to 4.32B (-1.3% CAGR), SBC is a modest 0.8% of revenue, and buybacks ran 1,124% of SBC - per-share value is being concentrated, not diluted. The one nit is net debt of -$5.4B (gross debt exceeds the $9.06B cash pile), but with $9.46B annual FCF the balance sheet is a non-issue; leverage is a tool, not a constraint. Earnings quality is good (accruals 3.2% of assets), though OCF/NI of 0.73x reflects ongoing content cash investment ahead of P&L recognition - normal for the model. Insider tape is benign: routine 10b5-1-style option-exercise-and-sell by Bradford Smith and Reed Hastings, no open-market buys but no red-flag selling either.
Verify before trusting this (6)
- Content amortization vs. cash content spend reconciliation in 10-K to confirm OCF/NI gap is structural, not deteriorating
- Ad-tier and password-sharing crackdown ARPU disclosures to confirm margin expansion is durable
- Subscriber growth and churn by region - is the topline still volumetric or now price-led?
- Debt maturity ladder and weighted cost vs. FCF coverage
- Whether the 13 insider sells were 10b5-1 plan executions (Form 4 footnotes)
- Off-balance-sheet content commitments to ensure leverage isn't understated
The price tag here is the story. Netflix is a self-funding, margin-expanding, buyback-active platform with 222M+ subs across 190 countries, and the market is paying $72.82 a share - implying a ~$308B cap that, on a Fortress-quality business throwing off real FCF with expanding operating margins, looks materially below deserved value. Even a sober DCF on a mid-teens revenue grower with 20%+ operating margins and a shrinking share count lands deserved value well north of current price; the e2e flag of 'High Conviction Required' likely reflects method dispersion, not a fragile thesis. Earnings quality is clean (no haircut), so I do not need to discount the reported numbers. What is priced in at $72.82 is essentially a low-growth maturing subscription business with ad-tier optionality worth zero. That is too dim a read against a company compounding FCF, raising ARPU via ad-tier and password-sharing crackdown, and buying back stock. Margin of safety looks wide; the bear case (sub deceleration, content cost creep, bundling pressure) is real but already more than reflected in the multiple. Verdict: a genuine gap between price and deserved value, not a quality halo.
Verify before trusting this (4)
- Ad-tier ARPU and subscriber mix in latest 10-Q/transcript
- Operating margin guidance trajectory and content cash spend run-rate
- Buyback pace and remaining authorization
- Churn and engagement metrics post password-sharing crackdown
The tape is nominally neutral but tilting risk-off (VIX ~19.5, S&P off highs, tech selling pre-bell on AI wake-up call headlines), and with a 1.49 beta NFLX absorbs that pressure harder than the index. More importantly, the live narrative around this specific name has cracked: the stock is at an 18-month low, down 32% since Hastings' departure was announced, and the press is openly questioning whether the founder-exit is linked to the drawdown. That is a classic narrative-durability hit on a platform-monopoly story. News flow this week reinforces the headwind: a 'Warner Bros. fiasco' story framing Netflix as struggling to shift the narrative, margin worries tied to chasing the next hit, and a horror-game launch that reads as a defensive pivot rather than a confident expansion. The one offset is the Omnicom/Acxiom AI ad-tech alliance, which feeds the ad-tier bull thesis. Analyst tone is backward-looking and stale-bullish (64 Buys, $111.83 target vs $72.82 price, zero revisions this month) - that gap between frozen sell-side targets and a visibly breaking tape is itself a headwind signal: downgrades likely lag, not lead.
Verify before trusting this (4)
- Whether sell-side targets get cut in the next 2-4 weeks - the first wave of revisions will mark the narrative reset
- Any subscriber or ad-tier data point that either confirms or refutes the Warner Bros. fiasco margin-pressure framing
- Stabilization of the high-beta tech tape post-AI-spend headlines - NFLX needs the macro to stop selling growth
- Follow-through (or lack of it) on the founder-exit narrative; a clean leadership message could blunt that 32% drawdown story
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 24, 2026 5:49am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $29.7B | $31.6B | $33.7B | $39.0B | $45.2B |
| Cost of Revenue | $17.3B | $19.2B | $19.7B | $21.0B | $23.3B |
| Gross Profit | $12.4B | $12.4B | $14.0B | $18.0B | $21.9B |
| Operating Expenses | $6.2B | $6.8B | $7.1B | $7.5B | $8.6B |
| Operating Income | $6.2B | $5.6B | $7.0B | $10.4B | $13.3B |
| Net Income | $5.1B | $4.5B | $5.4B | $8.7B | $11.0B |
| EBITDA | $19.0B | $20.3B | $21.5B | $26.3B | $30.3B |
| EPS | $1.16 | $1.01 | $1.23 | $2.03 | $2.58 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 24, 2026 5:46am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $6.0B | $5.1B | $7.1B | $7.8B | $9.0B |
| Total Current Assets | $8.1B | $9.3B | $9.9B | $13.1B | $13.0B |
| Total Assets | $44.6B | $48.6B | $48.7B | $53.6B | $55.6B |
| Current Liabilities | $8.5B | $7.9B | $8.9B | $10.8B | $11.0B |
| Long-Term Debt | $14.7B | $14.4B | $14.1B | $13.8B | $13.5B |
| Total Liabilities | $28.7B | $27.8B | $28.1B | $28.9B | $29.0B |
| Total Equity | $15.8B | $20.8B | $20.6B | $24.7B | $26.6B |
| Retained Earnings | $12.7B | $17.2B | $22.6B | $31.3B | $42.3B |
Cash Flow (Annual)
Last updated: Jun 24, 2026 5:47am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $392.6M | $2.0B | $7.3B | $7.4B | $10.1B |
| Capital Expenditure | -$524.6M | -$407.7M | -$348.6M | -$439.5M | -$688.2M |
| Free Cash Flow | -$132.0M | $1.6B | $6.9B | $6.9B | $9.5B |
| Acquisitions (net) | -$788.3M | -$757.4M | $0 | $0 | -$17.2M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$600.0M | $0 | -$6.0B | -$6.3B | -$9.1B |
| Net Change in Cash | -$2.2B | -$884.5M | $1.9B | $688.8M | $1.2B |
Analyst Estimates (Annual)
Last updated: Jun 24, 2026 5:46am (3d ago)| Metric | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|
| Revenue |
$57.4B $56.2B – $58.3B
|
$63.2B $63.2B – $63.3B
|
$68.6B $67.4B – $69.8B
|
$74.2B $72.9B – $75.5B
|
| EBITDA |
$37.5B $36.7B – $38.1B
|
$41.3B $41.3B – $41.3B
|
$44.8B $44.0B – $45.6B
|
$48.5B $47.6B – $49.3B
|
| Net Income |
$16.2B $15.6B – $17.4B
|
$19.0B $16.7B – $22.6B
|
$22.9B $22.4B – $23.5B
|
$26.8B $26.3B – $27.5B
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 24, 2026 5:49am (3d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +6.5% | +6.7% | +15.6% | +15.9% |
| Gross Profit Growth | +0.7% | +12.5% | +28.2% | +22.0% |
| Operating Income Growth | -9.1% | +23.5% | +49.8% | +27.9% |
| Net Income Growth | -12.2% | +20.4% | +61.1% | +26.1% |
| EBITDA Growth | +6.8% | +5.8% | +22.3% | +15.0% |
Insider Trading (Recent)
Last updated: Jun 24, 2026 5:49am (3d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 5,330.00 | $11.72 | $62,478 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 5,070.00 | $12.33 | $62,513 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,090.00 | $10.26 | $62,502 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,420.00 | $9.74 | $62,518 |
| 2026-06-17 | SMITH BRADFORD L | S-Sale | 22,190.00 | $77.21 | $1.7M |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,620.00 | $9.44 | $62,473 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,460.00 | $9.67 | $62,449 |
| 2026-06-17 | SMITH BRADFORD L | S-Sale | 13,800.00 | $78.01 | $1.1M |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,460.00 | $9.67 | $62,449 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,620.00 | $9.44 | $62,473 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,420.00 | $9.74 | $62,518 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 6,090.00 | $10.26 | $62,502 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 5,070.00 | $12.33 | $62,513 |
| 2026-06-17 | SMITH BRADFORD L | M-Exempt | 5,330.00 | $11.72 | $62,478 |
| 2026-06-01 | HASTINGS REED | M-Exempt | 386,700.00 | $10.26 | $4.0M |
| 2026-06-01 | HASTINGS REED | S-Sale | 332,917.00 | $85.85 | $28.6M |
| 2026-06-01 | HASTINGS REED | S-Sale | 53,783.00 | $86.73 | $4.7M |
| 2026-06-01 | HASTINGS REED | A-Award | 728.00 | $85.85 | $62,499 |
| 2026-06-01 | HASTINGS REED | M-Exempt | 386,700.00 | $10.26 | $4.0M |
| 2026-06-01 | Sweeney Anne M | A-Award | 728.00 | $85.85 | $62,499 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
The raw numbers here tell a story that doesn't match the $73 price tag. Netflix did $45.18B in 2025 revenue, $13.33B operating income (29.5% op margin), $10.98B net income, and $9.46B FCF. At a $308B market cap, that's ~28x trailing FCF and ~28x earnings — not the 22.99 P/E the TTM tag claims, and the divergence matters because the Q1'26 print of $5.28B net income on $12.25B revenue (43.1% margin) looks like a one-off (tax benefit, content amortization timing, or Argentina-style FX gain) rather than a new run-rate. Strip that quarter and margins sit in the 20-28% band they've held all year. Revenue growth is 15.9% YoY with quarterly progression $10.54B → $11.08B → $11.51B → $12.05B — that's sequential deceleration in growth rate, not acceleration, and the synthesis model's "52.5% implied FCF growth" reverse-DCF reading is the right alarm bell.
Where I disagree with the prior stack: the Market Forces module calls this "Market Tailwinds" and the classification calls it "mature_earner," but those two can't both be the dominant frame at 28x FCF. A mature earner growing revenue 16% with decelerating quarterly tempo and ~24% steady-state net margin is worth roughly 18-22x FCF in a normal rate regime — call it $170-210B, or $40-50/share against the 4.2B-ish share count implied by the cap/price. The $73 price is *already* a discount to where I'd mark a high-quality compounder, which is why the synthesis "High Conviction Required" verdict is closer to right than the bullish Market Forces tag. These two prior outputs contradict each other and the synthesis layer didn't reconcile them. The Narrative module's "anchored, moderate intensity, platform-monopoly" read is the most honest of the bunch — fundamentals do anchor this, and the story isn't doing heroic lifting.
The contrarian case against my own skepticism: Netflix's earnings CAGR of 42.5% over the lookback dwarfs its 15.8% revenue CAGR, which is exactly the operating leverage signature of a platform crossing fixed-cost scale. If ad-tier ARPU ramps and content spend stays disciplined (capex was only $688M against $10.15B OCF — that's a stunningly capital-light profile for a "content" company, and the bears who scream about content spend are looking at the wrong line), then 30%+ op margins are defensible and FCF could compound at 20% for another three years. In that world, $73 is cheap. The bear rebuttal: the Q4'25 print (20.1% margin) and Q3'25 (22.1%) suggest margin pressure is *already* visible inside the trailing year — the 43.1% Q1'26 spike is almost certainly noise, and the underlying trajectory is flat-to-down margins on decelerating revenue. That's not a 28x FCF business.
Data quality concerns: the four TTM-tagged metrics (P/E, EV/EBITDA, ROE, ROIC) are computed off a different window than the annual tile, and the 22.99 P/E doesn't reconcile to $308B / $10.98B = 28.1x using annual NI. Someone is using a TTM net income inflated by the Q1'26 anomaly. Balance sheet is incomplete — no total debt figure, which for a company that historically carried $14-15B in content-financing debt is a material omission for any EV-based multiple. Insider activity is all M-Exempt option exercises with two S-Sales totaling ~36k shares — immaterial, correctly tagged Neutral. I dissent partially from the synthesis: it's not "High Conviction Required" in the bullish direction — it's "High Conviction Required to justify the current price," and absent a believable path to 20%+ FCF growth for 3+ years, the math doesn't work. The prior models are giving Netflix credit for both maturity (stable margins) and growth (multiple expansion) simultaneously, which is the classic late-cycle analytical error.
GPT Critique
Netflix's financial data presents a compelling picture of a company that has achieved significant growth over the past few years. With revenues rising from $31.62B in 2022 to $45.18B in 2025, Netflix has demonstrated an impressive revenue CAGR of 15.8%. The company's net income growth is even more striking, with a CAGR of 42.5%, showcasing strong operational leverage. The Q1 2026 results, with a net income of $5.28B on $12.25B revenue (43.1% margin), appear anomalous when compared to preceding quarters where margins ranged from 18.2% to 28.2%. This suggests a potential one-off event rather than a sustainable trend. The company's cash flow profile is robust, with $10.15B in operating cash flow and a notable free cash flow of $9.46B, highlighting a capital-efficient business model, particularly for a content-driven enterprise.
Opus argues that Netflix's current valuation appears misaligned with its financial performance, suggesting the recent Q1 2026 margin spike is noise rather than a new baseline. I concur with this assessment; the 43.1% margin is likely an outlier given historical performance. Opus posits a fair value range of $55-65 per share, based on an 18-20x normalized FCF multiple. I agree with this valuation framework, considering the decelerating sequential growth and the mature earner archetype.
However, I diverge from Opus's conclusion on market dynamics. Opus sees a contradiction between the "Market Tailwinds" and "mature earner" narratives, arguing that both cannot justify a 28x FCF multiple. I believe these forces can coexist if Netflix maintains its strong brand and competitive moats while capitalizing on new revenue streams like the ad-supported tier and international expansion. The market's moderate narrative intensity and durable durability suggest that while growth may slow, Netflix's structural advantages and recurring-revenue model provide a solid base for future performance.
A careful skeptic might argue that Netflix's impressive earnings growth is masking underlying challenges such as content spending, competitive pressures, and subscriber saturation risks. They could point to the modest insider selling and lack of total debt figures as red flags that must be addressed in a comprehensive valuation. Furthermore, the narrative premium could be overly optimistic if the market is not fully accounting for potential margin compression and decelerating subscriber growth.