Netflix (NFLX)
Market Price (4/10/2026): $102.0 | Market Cap: $431.4 BilSector: Communication Services | Industry: Movies & Entertainment
Netflix (NFLX)
Market Price (4/10/2026): $102.0Market Cap: $431.4 BilSector: Communication ServicesIndustry: Movies & Entertainment
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 16% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 29% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 22%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 21%, CFO LTM is 10 Bil, FCF LTM is 9.5 Bil Stock buyback supportStock Buyback 3Y Total is 21 Bil Low stock price volatilityVol 12M is 34% Megatrend and thematic driversMegatrends include Digital Content & Streaming, and Future of Entertainment. Themes include Video Streaming, and Original Content Production. | Expensive valuation multiplesP/SPrice/Sales ratio is 9.6x, P/EBITPrice/EBIT or Price/(Operating Income) ratio is 32x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 43x Key risksNFLX key risks include [1] immense financial pressure from escalating content production costs and the potential for high-budget flops, Show more. |
| Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 16% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 29% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 22%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 21%, CFO LTM is 10 Bil, FCF LTM is 9.5 Bil |
| Stock buyback supportStock Buyback 3Y Total is 21 Bil |
| Low stock price volatilityVol 12M is 34% |
| Megatrend and thematic driversMegatrends include Digital Content & Streaming, and Future of Entertainment. Themes include Video Streaming, and Original Content Production. |
| Expensive valuation multiplesP/SPrice/Sales ratio is 9.6x, P/EBITPrice/EBIT or Price/(Operating Income) ratio is 32x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 43x |
| Key risksNFLX key risks include [1] immense financial pressure from escalating content production costs and the potential for high-budget flops, Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Netflix's decision to abandon the proposed acquisition of Warner Bros. Discovery assets in February 2026 significantly boosted investor confidence.
The stock had initially fallen to around $77 in February 2026 due to concerns over the potential deal's impact on Netflix's balance sheet and integration risks. However, the market reacted positively to Netflix's withdrawal, which included a $2.8 billion termination fee, as it allowed the company to refocus on its standalone growth strategy, margins, and capital allocation.
2. The company's robust Q4 2025 financial performance and optimistic 2026 growth projections fueled the stock's upward trend.
Netflix exceeded expectations in Q4 2025, reporting revenue of $12.05 billion, an 18% year-over-year increase, and diluted EPS of $0.56, surpassing analyst estimates of $11.97 billion and $0.55 respectively. The company also highlighted significant growth in its advertising-supported tier, with ad revenue more than doubling in 2025 to over $1.5 billion and projected to roughly double again in 2026 to approximately $3 billion. For 2026, Netflix guided for revenue growth of 12-14% to a midpoint of about $51.2 billion and anticipated operating margins around 30.5%.
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Stock Movement Drivers
Fundamental Drivers
The 8.8% change in NFLX stock from 12/31/2025 to 4/9/2026 was primarily driven by a 4.2% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 12312025 | 4092026 | Change |
|---|---|---|---|
| Stock Price ($) | 93.76 | 102.05 | 8.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 43,379 | 45,183 | 4.2% |
| Net Income Margin (%) | 24.0% | 24.3% | 1.1% |
| P/E Multiple | 38.2 | 39.3 | 3.0% |
| Shares Outstanding (Mil) | 4,245 | 4,229 | 0.4% |
| Cumulative Contribution | 8.8% |
Market Drivers
12/31/2025 to 4/9/2026| Return | Correlation | |
|---|---|---|
| NFLX | 8.8% | |
| Market (SPY) | -5.4% | 12.6% |
| Sector (XLC) | -2.9% | 33.8% |
Fundamental Drivers
The -14.9% change in NFLX stock from 9/30/2025 to 4/9/2026 was primarily driven by a -21.0% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 4092026 | Change |
|---|---|---|---|
| Stock Price ($) | 119.89 | 102.05 | -14.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 41,693 | 45,183 | 8.4% |
| Net Income Margin (%) | 24.6% | 24.3% | -1.1% |
| P/E Multiple | 49.7 | 39.3 | -21.0% |
| Shares Outstanding (Mil) | 4,252 | 4,229 | 0.5% |
| Cumulative Contribution | -14.9% |
Market Drivers
9/30/2025 to 4/9/2026| Return | Correlation | |
|---|---|---|
| NFLX | -14.9% | |
| Market (SPY) | -2.9% | 12.6% |
| Sector (XLC) | -3.2% | 30.2% |
Fundamental Drivers
The 9.4% change in NFLX stock from 3/31/2025 to 4/9/2026 was primarily driven by a 15.9% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 3312025 | 4092026 | Change |
|---|---|---|---|
| Stock Price ($) | 93.25 | 102.05 | 9.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 39,001 | 45,183 | 15.9% |
| Net Income Margin (%) | 22.3% | 24.3% | 8.8% |
| P/E Multiple | 45.8 | 39.3 | -14.2% |
| Shares Outstanding (Mil) | 4,277 | 4,229 | 1.1% |
| Cumulative Contribution | 9.4% |
Market Drivers
3/31/2025 to 4/9/2026| Return | Correlation | |
|---|---|---|
| NFLX | 9.4% | |
| Market (SPY) | 16.3% | 35.6% |
| Sector (XLC) | 19.6% | 44.5% |
Fundamental Drivers
The 195.4% change in NFLX stock from 3/31/2023 to 4/9/2026 was primarily driven by a 71.1% change in the company's Net Income Margin (%).| (LTM values as of) | 3312023 | 4092026 | Change |
|---|---|---|---|
| Stock Price ($) | 34.55 | 102.05 | 195.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 31,616 | 45,183 | 42.9% |
| Net Income Margin (%) | 14.2% | 24.3% | 71.1% |
| P/E Multiple | 34.2 | 39.3 | 14.8% |
| Shares Outstanding (Mil) | 4,452 | 4,229 | 5.3% |
| Cumulative Contribution | 195.4% |
Market Drivers
3/31/2023 to 4/9/2026| Return | Correlation | |
|---|---|---|
| NFLX | 195.4% | |
| Market (SPY) | 63.3% | 41.8% |
| Sector (XLC) | 103.0% | 47.3% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| NFLX Return | 11% | -51% | 65% | 83% | 5% | 6% | 84% |
| Peers Return | -0% | -42% | 37% | 16% | 35% | -5% | 18% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -1% | 81% |
Monthly Win Rates [3] | |||||||
| NFLX Win Rate | 42% | 42% | 58% | 83% | 50% | 50% | |
| Peers Win Rate | 48% | 32% | 67% | 55% | 52% | 45% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| NFLX Max Drawdown | -10% | -72% | -1% | -4% | -7% | -19% | |
| Peers Max Drawdown | -15% | -46% | -3% | -16% | -27% | -10% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: DIS, WBD, AMZN, CMCSA, AAPL. See NFLX Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 4/9/2026 (YTD)
How Low Can It Go
| Event | NFLX | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -75.9% | -25.4% |
| % Gain to Breakeven | 315.8% | 34.1% |
| Time to Breakeven | 832 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -22.9% | -33.9% |
| % Gain to Breakeven | 29.8% | 51.3% |
| Time to Breakeven | 28 days | 148 days |
| 2018 Correction | ||
| % Loss | -44.2% | -19.8% |
| % Gain to Breakeven | 79.1% | 24.7% |
| Time to Breakeven | 478 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -55.9% | -56.8% |
| % Gain to Breakeven | 126.9% | 131.3% |
| Time to Breakeven | 141 days | 1,480 days |
Compare to DIS, WBD, AMZN, CMCSA, AAPL
In The Past
Netflix's stock fell -75.9% during the 2022 Inflation Shock from a high on 11/17/2021. A -75.9% loss requires a 315.8% gain to breakeven.
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About Netflix (NFLX)
AI Analysis | Feedback
- Like Blockbuster, but for streaming movies and TV shows instantly to your devices instead of renting physical discs.
- A global cable TV provider, but all content is on-demand and streamed over the internet.
AI Analysis | Feedback
- Streaming Content Subscription: Provides access to TV series, documentaries, feature films, and mobile games for streaming across internet-connected devices.
- DVDs-by-Mail Subscription: Offers physical DVD and Blu-ray rentals delivered by mail within the United States.
AI Analysis | Feedback
Netflix (NFLX) sells primarily to individuals.
Its major customer categories are:
- Global Streaming Subscribers: This represents the vast majority of Netflix's customer base across 190 countries, who subscribe to consume TV series, documentaries, and feature films via various internet-connected devices.
- Mobile Gamers: A distinct segment of subscribers who engage with the mobile games offered by Netflix, representing a newer form of content consumption within their ecosystem.
- DVD-by-Mail Subscribers (United States): A specific, geographically limited customer segment in the United States that utilizes Netflix's legacy DVD rental service.
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Amazon (AMZN)
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Reed Hastings, Chairman
Reed Hastings co-founded Netflix in 1997 and served as CEO for 25 years before transitioning to Executive Chairman in 2023. Prior to Netflix, he founded Pure Software in 1991, which he took public and sold in 1997. Hastings is an active educational philanthropist and previously served as President of the California State Board of Education. He also sits on the boards of private companies Bloomberg and Anthropic.
Ted Sarandos, Co-CEO
Ted Sarandos has served as co-chief executive officer of Netflix since July 2020. He joined Netflix in 2000 and, prior to becoming co-CEO, was the company's chief content officer, overseeing its original programming and entertainment efforts. His early career involved managing retail video stores and serving as Vice President of Product and Merchandising for Video City/West Coast Video, a chain of almost 500 stores, until March 2000. Sarandos was responsible for initiating Netflix's first round of original programming.
Greg Peters, Co-CEO
Greg Peters was named co-CEO of Netflix in January 2023. Before this, he held roles as Chief Operating Officer and Chief Product Officer at Netflix. Peters joined Netflix in 2008 as International Development Officer. Prior to his tenure at Netflix, he was Senior Vice President of consumer electronics products for Macrovision Solutions Corp. He notably led Netflix's expansion into Asia, including its launch in Japan in 2015, and has been a key driver behind the company's ventures into gaming and the introduction of its ad-supported subscription tier.
Spencer Neumann, Chief Financial Officer
Spencer Neumann was appointed CFO of Netflix in January 2019. His previous experience includes serving as CFO of Activision Blizzard and holding various positions at The Walt Disney Company, such as CFO and Executive Vice President of Global Guest Experience of Walt Disney Parks and Resorts. Neumann also worked at the private equity firms of Providence Equity Partners and Summit Partners. He currently serves on the board of Adobe.
Bela Bajaria, Chief Content Officer
Bela Bajaria has served as Netflix's Chief Content Officer since January 2023, overseeing the company's global television and film content strategy. She joined Netflix in 2016, initially responsible for unscripted and scripted series. Before joining Netflix, Bajaria was President of Universal Television. She began her career in the entertainment industry as an assistant in the movies and miniseries department at CBS in 1996. Under her leadership, Netflix has expanded its content offerings to include a diverse range of genres and formats, including live events and sports.
AI Analysis | Feedback
The key risks to Netflix's business include:
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Intense Competition and Market Saturation: Netflix faces significant competition from a growing number of streaming services, including major players like Disney+, Amazon Prime Video, HBO Max, and Apple TV+. This competitive landscape has led to increased content spending across the industry, making it challenging for Netflix to acquire and retain subscribers, particularly in mature markets such as the United States where its penetration is already high. Competitors' strategies, such as content bundling and leveraging strong franchises, also contribute to churn risk and make subscriber retention more difficult for Netflix.
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Escalating Content Costs and Margin Compression: To compete effectively and attract new subscribers, Netflix continues to invest heavily in producing and acquiring original content. This substantial and increasing content expenditure, which can exceed billions of dollars annually, is a significant financial burden. While essential for differentiation, these rising content costs can lead to a reduction in operating margins and impact overall profitability, especially if subscriber growth does not keep pace.
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Slowing Subscriber Growth and Monetization Challenges: Netflix has experienced a slowdown in subscriber growth in established markets, like the U.S. and Canada, attributed partly to market saturation and previous price increases. Although efforts like cracking down on password sharing have shown short-term benefits in boosting revenue and subscriber numbers, there is an inherent risk of alienating existing users. Furthermore, the effectiveness of new monetization strategies, such as ad-supported tiers, in fully offsetting the deceleration of premium subscriber growth remains a concern for the company.
AI Analysis | Feedback
The proliferation of well-funded, content-rich streaming services from major media companies (e.g., Disney+, Max, Amazon Prime Video, Apple TV+) poses a clear emerging threat. This intense competition for subscribers and content leads to escalating content production and acquisition costs, increased subscriber churn due to market saturation and subscription fatigue, and the withdrawal of popular licensed content by studios for their own platforms.
AI Analysis | Feedback
Netflix's main products and services operate within several addressable markets, primarily global video streaming and mobile gaming, and a smaller, declining market for DVD-by-mail services in the United States.
Global Video Streaming / Subscription Video on Demand (SVOD)
The global Subscription Video on Demand (SVOD) market, which encompasses Netflix's core streaming service, was valued at approximately USD 128.43 billion in 2024 and is projected to grow to USD 209.35 billion by 2030, exhibiting a Compound Annual Growth Rate (CAGR) of 8.5% over the forecast period. Another estimate places the global SVOD market at USD 130.2 billion in 2024, expecting it to expand to USD 237.4 billion by 2030 with a CAGR of 9.8%. More broadly, the global video streaming market was estimated at USD 129.26 billion in 2024 and is projected to reach USD 416.8 billion by 2030, growing at a CAGR of 21.5% from 2025 to 2030. Other analyses forecast the global video streaming market to reach USD 843.0 billion by 2033, from USD 137.9 billion in 2024, with a CAGR of 22.3% from 2025 to 2033. The overall video on demand market was valued at USD 170.3 billion in 2024 and reached USD 198.3 billion in 2025.
Global Mobile Gaming
Netflix has expanded into mobile games, tapping into the global mobile gaming market. This market was valued at approximately USD 100.08 billion in 2024 and is estimated to reach USD 216.82 billion by 2033, demonstrating a CAGR of 8.52% from 2025-2033. Another report estimates the global mobile gaming market size at USD 139.38 billion in 2024, with a projection to reach USD 256.19 billion by 2030, growing at a CAGR of 10.2% from 2025 to 2030.
U.S. DVD, Game & Video Rental
For its DVDs-by-mail membership services, Netflix operates within the U.S. DVD, Game & Video Rental market. This market was valued at USD 630.1 million in 2025 and is estimated to be around USD 606.3 million in 2026. This market has experienced a decline, with revenue dropping at a CAGR of 9.0% through the five years to 2026.
AI Analysis | Feedback
Here are 3-5 expected drivers of future revenue growth for Netflix (NFLX) over the next 2-3 years:- Growth of Ad-Supported Tier: Netflix's ad-supported subscription tier is a significant driver, having reached 94 million subscribers globally by May 2025, a 34% increase from November 2024. This less-expensive option now accounts for 50% of all new Netflix subscribers. Netflix more than doubled its ad revenue in 2025 compared to 2024, to over $1.5 billion, and expects it to roughly double again in 2026 to about $3 billion.
- Paid Sharing Initiative: The strategic crackdown on password sharing has proven to be a major success, converting unauthorized viewers into paying subscribers. This initiative significantly bolstered subscriber numbers, adding 9.3 million new subscribers in Q1 2024 and 9 million new subscribers globally in Q3 2023.
- Price Increases and Average Revenue Per Membership (ARM) Growth: Netflix has been implementing price increases, and management expects continued growth in average revenue per membership (ARM) which contributes to overall revenue. While Q1 2024 saw modest ARM growth, the company expects it to continue throughout the year.
- Content Investment and Diversification: A strong and diverse content slate, including original programming, international productions, reality shows, live events, and sports, is crucial for attracting and retaining subscribers. Netflix is also expanding its content offerings to include video podcasts and live sports, such as the World Baseball Classic in Japan and MLB rights.
- Gaming Monetization: While Netflix's gaming strategy primarily focuses on enhancing subscriber engagement and retention, the company is exploring new monetization strategies for its gaming platform. Potential revenue streams could include in-game purchases and premium gaming subscriptions, moving beyond the current model where most games are free of in-app purchases.
AI Analysis | Feedback
```html[1] Share Repurchases
- Netflix reported net common equity repurchases of approximately $22.772 billion in 2025.
- Net common equity repurchases were approximately $5.431 billion in 2024.
- In 2023, net common equity repurchases amounted to approximately $5.875 billion.
[2] Share Issuance
- Netflix's shares outstanding declined by 1.11% in 2025 to 4.344 billion, indicating net share repurchases over issuance.
- In 2024, shares outstanding decreased by 2.28% to 4.393 billion, also reflecting net repurchases.
- Shares outstanding saw a 0.4% decline in 2023, reaching 4.495 billion, suggesting a continuation of net share repurchases.
[4] Outbound Investments
- Netflix did not report meaningful long-term investments (outbound) for 2025, 2024, or 2023, with figures recorded as $0B for these years.
[5] Capital Expenditures
- Capital expenditures peaked in December 2025 at $688.2 million.
- In 2024, capital expenditures were approximately $439.5 million.
- Capital expenditures were $348.6 million in 2023, marking its five-year low.
Latest Trefis Analyses
Trade Ideas
Select ideas related to NFLX.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 03272026 | META | Meta Platforms | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 8.8% | 8.8% | 0.0% |
| 03062026 | CARG | CarGurus | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 1.2% | 1.2% | -8.3% |
| 02132026 | YELP | Yelp | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | 17.9% | 17.9% | -5.7% |
| 02132026 | TRIP | Tripadvisor | Dip Buy | DB | FCF Yield | Low D/EDip Buy with High Free Cash Flow YieldBuying dips for companies with significant free cash flow yield (FCF / Market Cap) and reasonable debt / market cap | 10.9% | 10.9% | -3.9% |
| 02062026 | OMC | Omnicom | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 8.9% | 8.9% | -3.7% |
| 04302024 | NFLX | Netflix | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 37.9% | 105.5% | 0.0% |
| 01312022 | NFLX | Netflix | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | -47.0% | -17.2% | -61.1% |
Research & Analysis
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 100.92 |
| Mkt Cap | 304.9 |
| Rev LTM | 109,712 |
| Op Inc LTM | 17,150 |
| FCF LTM | 8,578 |
| FCF 3Y Avg | 11,358 |
| CFO LTM | 24,637 |
| CFO 3Y Avg | 22,244 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 6.8% |
| Rev Chg 3Y Avg | 4.2% |
| Rev Chg Q | 9.4% |
| QoQ Delta Rev Chg LTM | 2.5% |
| Op Mgn LTM | 15.5% |
| Op Mgn 3Y Avg | 15.7% |
| QoQ Delta Op Mgn LTM | -0.0% |
| CFO/Rev LTM | 21.0% |
| CFO/Rev 3Y Avg | 19.2% |
| FCF/Rev LTM | 11.9% |
| FCF/Rev 3Y Avg | 11.8% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 304.9 |
| P/S | 2.7 |
| P/EBIT | 21.7 |
| P/E | 32.4 |
| P/CFO | 16.9 |
| Total Yield | 3.3% |
| Dividend Yield | 0.2% |
| FCF Yield 3Y Avg | 3.6% |
| D/E | 0.2 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -0.5% |
| 3M Rtn | -1.1% |
| 6M Rtn | 2.6% |
| 12M Rtn | 16.3% |
| 3Y Rtn | 70.9% |
| 1M Excs Rtn | -1.1% |
| 3M Excs Rtn | -0.2% |
| 6M Excs Rtn | -0.3% |
| 12M Excs Rtn | -7.6% |
| 3Y Excs Rtn | 7.0% |
Comparison Analyses
Price Behavior
| Market Price | $102.05 | |
| Market Cap ($ Bil) | 431.6 | |
| First Trading Date | 05/23/2002 | |
| Distance from 52W High | -23.8% | |
| 50 Days | 200 Days | |
| DMA Price | $89.33 | $106.66 |
| DMA Trend | down | up |
| Distance from DMA | 14.2% | -4.3% |
| 3M | 1YR | |
| Volatility | 40.7% | 32.6% |
| Downside Capture | 0.02 | 0.28 |
| Upside Capture | 90.45 | 47.38 |
| Correlation (SPY) | 13.7% | 31.0% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.10 | 0.70 | 0.40 | 0.37 | 0.64 | 0.94 |
| Up Beta | 0.26 | 0.95 | 0.64 | 0.71 | 0.81 | 0.84 |
| Down Beta | -1.46 | 0.13 | 0.06 | 0.09 | 0.53 | 0.75 |
| Up Capture | 73% | 164% | 59% | 7% | 39% | 183% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 12 | 25 | 29 | 57 | 127 | 390 |
| Down Capture | 61% | 30% | 50% | 77% | 70% | 101% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 10 | 17 | 34 | 69 | 125 | 360 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with NFLX | |
|---|---|---|---|---|
| NFLX | 17.7% | 33.6% | 0.52 | - |
| Sector ETF (XLC) | 32.2% | 16.8% | 1.49 | 41.1% |
| Equity (SPY) | 29.1% | 17.4% | 1.36 | 31.2% |
| Gold (GLD) | 61.3% | 27.8% | 1.72 | 3.9% |
| Commodities (DBC) | 26.9% | 16.7% | 1.41 | 9.3% |
| Real Estate (VNQ) | 17.7% | 15.4% | 0.86 | 15.2% |
| Bitcoin (BTCUSD) | -10.9% | 43.9% | -0.14 | 18.6% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with NFLX | |
|---|---|---|---|---|
| NFLX | 13.6% | 42.9% | 0.44 | - |
| Sector ETF (XLC) | 10.0% | 20.7% | 0.39 | 58.5% |
| Equity (SPY) | 11.4% | 17.0% | 0.52 | 48.7% |
| Gold (GLD) | 22.2% | 17.8% | 1.02 | 7.4% |
| Commodities (DBC) | 11.5% | 18.8% | 0.50 | 7.2% |
| Real Estate (VNQ) | 3.7% | 18.8% | 0.10 | 24.3% |
| Bitcoin (BTCUSD) | 3.6% | 56.5% | 0.29 | 25.5% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with NFLX | |
|---|---|---|---|---|
| NFLX | 25.9% | 41.6% | 0.70 | - |
| Sector ETF (XLC) | 9.4% | 22.3% | 0.50 | 60.2% |
| Equity (SPY) | 13.9% | 17.9% | 0.67 | 47.9% |
| Gold (GLD) | 14.1% | 15.9% | 0.74 | 6.9% |
| Commodities (DBC) | 8.5% | 17.6% | 0.40 | 12.5% |
| Real Estate (VNQ) | 5.1% | 20.7% | 0.21 | 23.3% |
| Bitcoin (BTCUSD) | 67.1% | 66.9% | 1.06 | 14.8% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 1/20/2026 | -2.2% | -1.9% | -11.8% |
| 10/21/2025 | -10.1% | -11.2% | -11.4% |
| 7/17/2025 | -5.1% | -7.3% | -2.8% |
| 4/17/2025 | 1.5% | 13.2% | 22.5% |
| 10/17/2024 | 11.1% | 9.7% | 19.8% |
| 7/18/2024 | -1.5% | -1.4% | 4.8% |
| 4/18/2024 | -9.1% | -7.5% | 1.7% |
| 1/23/2024 | 10.7% | 14.4% | 19.6% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 8 | 9 | 13 |
| # Negative | 15 | 14 | 10 |
| Median Positive | 10.9% | 13.2% | 10.2% |
| Median Negative | -6.5% | -7.4% | -11.3% |
| Max Positive | 16.9% | 20.8% | 34.9% |
| Max Negative | -35.1% | -43.1% | -49.2% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 01/23/2026 | 10-K |
| 09/30/2025 | 10/22/2025 | 10-Q |
| 06/30/2025 | 07/18/2025 | 10-Q |
| 03/31/2025 | 04/18/2025 | 10-Q |
| 12/31/2024 | 01/27/2025 | 10-K |
| 09/30/2024 | 10/18/2024 | 10-Q |
| 06/30/2024 | 07/19/2024 | 10-Q |
| 03/31/2024 | 04/22/2024 | 10-Q |
| 12/31/2023 | 01/26/2024 | 10-K |
| 09/30/2023 | 10/20/2023 | 10-Q |
| 06/30/2023 | 07/21/2023 | 10-Q |
| 03/31/2023 | 04/21/2023 | 10-Q |
| 12/31/2022 | 01/26/2023 | 10-K |
| 09/30/2022 | 10/20/2022 | 10-Q |
| 06/30/2022 | 07/21/2022 | 10-Q |
| 03/31/2022 | 04/21/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q4 2025 Earnings Reported 1/20/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Revenue | 12.16 Bil | 1.6% | Higher New | Actual: 11.96 Bil for Q4 2025 | |||
| Q1 2026 Operating Income | 3.91 Bil | 36.6% | Higher New | Actual: 2.86 Bil for Q4 2025 | |||
| Q1 2026 Operating Margin | 32.1% | 34.3% | 8.2% | Higher New | Actual: 23.9% for Q4 2025 | ||
| Q1 2026 Net Income | 3.26 Bil | 38.6% | Higher New | Actual: 2.35 Bil for Q4 2025 | |||
| Q1 2026 EPS | 0.76 | -86.0% | Lower New | Actual: 5.45 for Q4 2025 | |||
| 2026 Revenue | 50.70 Bil | 51.20 Bil | 51.70 Bil | 13.5% | Higher New | Actual: 45.10 Bil for 2025 | |
| 2026 Revenue Growth | 12.0% | 13.0% | 14.0% | -22.2% | -3.7% | Lower New | Actual: 16.7% for Q4 2025 |
| 2026 Ad Revenue Growth | 100.0% | ||||||
| 2026 Operating Margin | 31.5% | 8.6% | 2.5% | Higher New | Actual: 29.0% for 2025 | ||
| 2026 Free Cash Flow | 11.00 Bil | 22.2% | Higher New | Actual: 9.00 Bil for 2025 | |||
Prior: Q3 2025 Earnings Reported 10/21/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q4 2025 Revenue | 11.96 Bil | 3.8% | Higher New | Actual: 11.53 Bil for Q3 2025 | |||
| Q4 2025 Revenue Growth | 16.7% | -3.5% | -0.6% | Lower New | Actual: 17.3% for Q3 2025 | ||
| Q4 2025 Operating Income | 2.86 Bil | -21.1% | Lower New | Actual: 3.62 Bil for Q3 2025 | |||
| Q4 2025 Operating Margin | 23.9% | -24.1% | -7.6% | Lower New | Actual: 31.5% for Q3 2025 | ||
| Q4 2025 Net Income | 2.35 Bil | -20.9% | Lower New | Actual: 2.98 Bil for Q3 2025 | |||
| Q4 2025 EPS | 5.45 | -20.7% | Lower New | Actual: 6.87 for Q3 2025 | |||
| 2025 Revenue | 45.10 Bil | 0.2% | Raised | Guidance: 45.00 Bil for 2025 | |||
| 2025 Operating Margin | 29.0% | -1.7% | -0.5% | Lowered | Guidance: 29.5% for 2025 | ||
| 2025 Free Cash Flow | 9.00 Bil | 9.1% | Raised | Guidance: 8.25 Bil for 2025 | |||
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Hastings, Reed | Direct | Sell | 1052026 | 91.67 | 426,290 | 39,077,470 | 361,175 | Form | |
| 2 | Hastings, Reed | Direct | Sell | 12022025 | 108.43 | 375,470 | 40,712,436 | 427,217 | Form | |
| 3 | Willems, Cletus R | Chief Global Affairs Officer | Direct | Sell | 11062025 | 1100.33 | 238 | Form | ||
| 4 | Peters, Gregory K | Co-CEO | Direct | Sell | 11052025 | 1095.68 | 2,027 | 2,220,943 | 14,003,886 | Form |
| 5 | Neumann, Spencer Adam | Chief Financial Officer | Direct | Sell | 11052025 | 1093.78 | 695 | 760,177 | 4,026,204 | Form |
NFLX Trade Sentinel
ACCUMULATE (Score 7-8)
CONVICTION RATIONALE
The Probability-Adjusted Skew of 1.77x is attractive and falls into the 'Buyable' tier. The investment thesis hinges on management's proven ability to execute a strategic pivot towards advertising and profitability. While the binary regulatory risk surrounding the WBD acquisition is significant and caps the upside probability, the underlying strength of the core business provides a solid foundation, making the risk-reward profile favorable.
STOCK ARCHETYPE
High-Beta CompounderNetflix exhibits strong revenue growth (+16% YoY), expanding operating margins (29.5% targeting 31.5%), and robust free cash flow, characteristic of a compounder. However, its high valuation, decelerating subscriber growth, and major strategic pivots like the WBD acquisition introduce significant volatility and beta, aligning it with a 'High-Beta' profile where growth durability is paramount.
INVESTMENT THESIS
The primary driver for shareholder return is the successful pivot from a purely subscription-based model to a dual revenue stream including high-margin advertising. This shift allows for increased monetization of the existing 325 million subscriber base through both direct ad revenue and strategic price hikes on ad-free tiers, fundamentally enhancing profitability.
- Advertising revenue grew over 150% in 2025 to more than $1.5 billion.
- Management projects advertising revenue will roughly double again in 2026.
- Operating margin expanded from 26.7% in 2024 to 29.5% in 2025, with a target of 31.5% for 2026.
- Free cash flow increased by 36.7% to $9.46 billion in 2025, demonstrating accretive capital deployment.
PRIMARY RISK
The single largest risk is the failure of the proposed ~$83B acquisition of WBD's assets due to regulatory intervention. The deal faces intense antitrust scrutiny from the DOJ and a bipartisan Senate subcommittee, creating a high probability of being blocked or saddled with material divestitures that would nullify its strategic value.
- The Department of Justice (DOJ) has opened a formal investigation into potential antitrust issues.
- A U.S. Senate Judiciary subcommittee hearing on Feb 3, 2026, revealed bipartisan concerns over reduced consumer choice and market concentration.
- The deal requires taking on over $42B in new debt, and its failure would represent a significant strategic setback for which the company has already paused share buybacks.
| KPI | Threshold | Rationale |
|---|---|---|
| Advertising Revenue Growth | >80% YoY | This is the primary 'Alpha Driver'. The thesis depends on the ad business scaling rapidly to re-accelerate profit growth. Anything less than ~80% growth in 2026 would signal a major failure in this strategic pivot. |
| Operating Margin | Meet or exceed 31.5% guidance for FY2026 | Margin expansion is the core tenet of the investment case, proving the company has durable pricing power and operating leverage. Failure to meet its own guidance would break this narrative. |
| Annual Subscriber Growth | >6% in FY2026 | While decelerating, subscriber growth must remain positive and meaningful. A drop below mid-single digits would indicate the core business is saturating faster than expected, placing excessive pressure on the ad business to perform. |
The WBD Merger vs. Standalone Execution
BULL VIEW
Successful pivot to advertising (150%+ growth) and margin expansion (targeting 31.5%) proves a durable, highly profitable standalone business regardless of the WBD deal.
CORE TENSION
Can scaling high-margin ad revenue and expanding margins offset decelerating core growth if the strategic WBD acquisition is blocked by regulators?
PREVAILING SENTIMENT
The DOJ's formal investigation and bipartisan Senate opposition to the WBD merger, coupled with management's own guidance for decelerating revenue growth to 12-14% in 2026 from 16% in 2025.
BEAR VIEW
The WBD deal failure is the primary risk. It would remove perceived synergies, refocusing investors on decelerating subscriber growth and triggering a negative re-rating.
| Timeline | Event & Metric To Watch |
|---|---|
Anytime (Next 6 months) | DOJ Ruling on WBD Acquisition Watch: Binary outcome: Formal announcement of a lawsuit to block the deal versus a conditional approval. This is the primary investment debate. |
Late April 2026 | Q1 2026 Earnings Report Watch: Net subscriber additions. A number below the low end of guidance confirms the post-password-crackdown growth slowdown is material. |
Ongoing (6-Month Slow Burn) | Competitor Bundling Strategy Watch: Subscriber churn rate and Average Revenue per Member (ARPU) growth. Watch for competitors like Disney launching deeply discounted 'super bundles'. |
| Date | Event | Stock Impact |
|---|---|---|
Aug 14, 2025 | New Partnership with a Major Ad-Tech Platform Details: Netflix announced a strategic partnership to enhance its advertising technology stack, signaling a deeper commitment to scaling its ad business. The stock reacted positively to the news. | Rose significantly by 2.17% $120.44 -> $123.05 |
Oct 21, 2025 | Q3 2025 Earnings Release Details: The company reported a significant earnings miss of -14.5% versus consensus estimates, causing a sharp stock decline and damaging confidence in management's forecasting ability. | Plummeted -10.07% $124.13 -> $111.63 |
Dec 5, 2025 | Announced Proposed Acquisition of Warner Bros. Discovery Assets Details: Netflix announced its intention to acquire WBD's studio and HBO assets for ~$83B. The stock dropped, signaling immediate investor concern over the price, debt, and regulatory hurdles. | Fell notably by -2.89% $103.22 -> $100.24 |
Jan 21, 2026 | Q4 2025 Earnings Release Details: Netflix reported Q4 revenue of $12.05B (+17.6% YoY), beating expectations. However, the market reacted negatively, focusing on decelerating forward guidance and merger-related risks. | Fell notably by -2.13% $85.36 -> $83.54 |
Jan 29, 2026 | Major Insider Sale by Co-CEO Details: Co-CEO Gregory K. Peters sold approximately $8.77 million in stock, reducing his direct ownership by 46.41%, raising concerns about executive conviction in the company's outlook. | Slight -1.75% pullback $84.64 -> $83.16 |
Feb 3, 2026 | U.S. Senate Subcommittee Hearing on WBD Merger Details: A Senate Judiciary subcommittee hearing revealed bipartisan concerns over the proposed Warner Bros. Discovery acquisition, increasing fears of a regulatory blockade. The stock fell on the news. | Fell notably by -3.41% $82.76 -> $79.94 |
Position Sizing
1% - 3%
CONSERVATIVE
The stock trades with Moderate volatility (2.6x S&P). However, the Bearish sentiment, driven by high-stakes regulatory risk, and only Medium visibility warrant a Conservative sizing until the WBD merger outcome is known.
Diversification Alternatives
TTD
SECTORPure-play on the secular growth of programmatic advertising, especially CTV, without the massive regulatory and integration risk of the NFLX/WBD merger. A cleaner growth narrative.
SPOT
SECTORA global subscription leader with a simpler growth path focused on converting free users and expanding into new audio verticals, avoiding NFLX's market saturation and M&A risks.
Netflix is transforming from a pure-play streaming subscription service into a diversified content and advertising powerhouse, potentially bolstered by strategic acquisitions.
All news should be filtered through the lens of Netflix's strategic pivot towards advertising and content consolidation to drive sustained profit growth.
News confirming strong subscriber growth on the ad-supported tier, positive ARPU trends from advertising, progress on the Warner Bros. Discovery acquisition, or successful integration of acquired content assets.
News indicating regulatory hurdles or blockage for the Warner Bros. Discovery acquisition, poor performance of the ad-supported tier, significant decline in core subscriber base, or a multi-billion dollar break-up fee related to the acquisition.
Generic streaming industry reports without specific Netflix data, content production announcements for non-blockbuster titles, or executive hires unrelated to advertising or M&A strategy. These items do not directly impact the re-rating thesis around ad-tier scaling or strategic acquisitions.
Repricing Catalyst
The scaling of the high-margin advertising business, projected to double to ~$3 billion in 2026, and the potential strategic acceleration from the proposed Warner Bros. Discovery asset acquisition.
Ad-Supported Streaming Subscriptions
$1.5B TTM (% of Total) · % MarginWhat It Is
Ad-supported subscription plans, delivering video content with integrated commercials.
Who Pays & How
Subscribers seeking a lower-cost alternative to ad-free plans, attracted by content library access; advertisers pay to reach specific demographics within Netflix's vast global audience due to platform reach.
Competition
Core Subscription Streaming
$0.0B TTM (% of Total) · % MarginWhat It Is
Subscription plans offering unlimited, ad-free access to movies, TV shows, and games (standard and premium tiers).
Who Pays & How
Global consumers paying recurring monthly fees for exclusive original content and a vast licensed library, driven by convenience and value of content library; industry-leading retention indicates strong lock-in.
Competition
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