Netflix Inc (NFLX) stock analysis

P/E below its 5-year median

Netflix's P/E of 18.7 is below its own 5-year median of 42.9.

P/E above the industry

Netflix's P/E of 18.7 is above the Communication services median of 16.8.

EV/EBITDA below its 5-year median

Netflix's EV/EBITDA of 17.0 is below its 5-year median of 32.4.

P/B above the industry

Netflix's price-to-book of 9.05 is above the Communication services median of 1.71.

Trading below fair value

The share price of $64.54 is below our fair value estimate of $92.66.

Margin of safety over 20%

The price is 30.3% below fair value, more than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 12.6% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 36.5% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 41.6% over the last twelve months, against a 5-year average of 31.8% a year.

Growing faster than the industry

Revenue grew 14.7% over the last twelve months; the Communication services median is 8.5%.

Guidance raised

Netflix raised its 2026 FCF outlook on Apr 16, 2026.

Gross margin improving

Gross margin was 50.7% over the last twelve months, against 48.1% a year earlier.

Return on equity over 15%

Return on equity was 53.5% over the last twelve months and averaged 34.0% over five years.

Return on capital over 10%

Return on invested capital was 38.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Netflix's return on equity of 53.5% is above the Communication services median of -18.7%.

Earnings grew over 5 years

Net income grew 31.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 29.7% over the last twelve months, against a 5-year average of 18.8%.

Net margin above the industry

Netflix's net margin of 29.7% is above the Communication services median of -2.6%.

High debt

Debt is 51.7% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 147% five years ago to 51.7%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 81.3% of total debt.

Interest well covered

Operating income covers interest expense 18.2 times.

Short-term assets cover short-term debts

Current assets are 1.07 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 8.45; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Netflix has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.