Netflix (NFLX)
Market Price (3/2/2026): $95.58 | Market Cap: $404.2 BilSector: Communication Services | Industry: Movies & Entertainment
Netflix (NFLX)
Market Price (3/2/2026): $95.58Market Cap: $404.2 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% | Expensive valuation multiplesP/SPrice/Sales ratio is 9.0x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 40x |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 29% | Key risksNFLX key risks include [1] immense financial pressure from escalating content production costs and the potential for high-budget flops, Show more. |
| 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 | |
| Low stock price volatilityVol 12M is 36% | |
| Megatrend and thematic driversMegatrends include Digital Content & Streaming, and Future of Entertainment. Themes include Video Streaming, and Original Content Production. |
| 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 |
| Low stock price volatilityVol 12M is 36% |
| 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 9.0x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 40x |
| Key risksNFLX key risks include [1] immense financial pressure from escalating content production costs and the potential for high-budget flops, Show more. |
Stock Movement Drivers
Fundamental Drivers
The -10.5% change in NFLX stock from 11/30/2025 to 3/1/2026 was primarily driven by a -15.3% change in the company's P/E Multiple.| (LTM values as of) | 11302025 | 3012026 | Change |
|---|---|---|---|
| Stock Price ($) | 107.58 | 96.24 | -10.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 43,379 | 45,183 | 4.2% |
| Net Income Margin (%) | 24.0% | 24.3% | 1.1% |
| P/E Multiple | 43.8 | 37.1 | -15.3% |
| Shares Outstanding (Mil) | 4,245 | 4,229 | 0.4% |
| Cumulative Contribution | -10.5% |
Market Drivers
11/30/2025 to 3/1/2026| Return | Correlation | |
|---|---|---|
| NFLX | -10.5% | |
| Market (SPY) | 0.4% | 7.3% |
| Sector (XLC) | 2.3% | 27.2% |
Fundamental Drivers
The -20.3% change in NFLX stock from 8/31/2025 to 3/1/2026 was primarily driven by a -26.1% change in the company's P/E Multiple.| (LTM values as of) | 8312025 | 3012026 | Change |
|---|---|---|---|
| Stock Price ($) | 120.83 | 96.24 | -20.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 41,693 | 45,183 | 8.4% |
| Net Income Margin (%) | 24.6% | 24.3% | -1.1% |
| P/E Multiple | 50.1 | 37.1 | -26.1% |
| Shares Outstanding (Mil) | 4,252 | 4,229 | 0.5% |
| Cumulative Contribution | -20.3% |
Market Drivers
8/31/2025 to 3/1/2026| Return | Correlation | |
|---|---|---|
| NFLX | -20.3% | |
| Market (SPY) | 6.6% | 14.2% |
| Sector (XLC) | 6.3% | 29.1% |
Fundamental Drivers
The -1.9% change in NFLX stock from 2/28/2025 to 3/1/2026 was primarily driven by a -23.0% change in the company's P/E Multiple.| (LTM values as of) | 2282025 | 3012026 | Change |
|---|---|---|---|
| Stock Price ($) | 98.06 | 96.24 | -1.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 39,001 | 45,183 | 15.9% |
| Net Income Margin (%) | 22.3% | 24.3% | 8.8% |
| P/E Multiple | 48.1 | 37.1 | -23.0% |
| Shares Outstanding (Mil) | 4,277 | 4,229 | 1.1% |
| Cumulative Contribution | -1.9% |
Market Drivers
2/28/2025 to 3/1/2026| Return | Correlation | |
|---|---|---|
| NFLX | -1.9% | |
| Market (SPY) | 16.5% | 40.7% |
| Sector (XLC) | 16.8% | 48.8% |
Fundamental Drivers
The 198.8% change in NFLX stock from 2/28/2023 to 3/1/2026 was primarily driven by a 71.1% change in the company's Net Income Margin (%).| (LTM values as of) | 2282023 | 3012026 | Change |
|---|---|---|---|
| Stock Price ($) | 32.21 | 96.24 | 198.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 31,616 | 45,183 | 42.9% |
| Net Income Margin (%) | 14.2% | 24.3% | 71.1% |
| P/E Multiple | 31.9 | 37.1 | 16.1% |
| Shares Outstanding (Mil) | 4,452 | 4,229 | 5.3% |
| Cumulative Contribution | 198.8% |
Market Drivers
2/28/2023 to 3/1/2026| Return | Correlation | |
|---|---|---|
| NFLX | 198.8% | |
| Market (SPY) | 79.6% | 43.0% |
| Sector (XLC) | 127.2% | 48.8% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| NFLX Return | 11% | -51% | 65% | 83% | 5% | -10% | 56% |
| Peers Return | -0% | -42% | 37% | 16% | 35% | -1% | 23% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 1% | 84% |
Monthly Win Rates [3] | |||||||
| NFLX Win Rate | 42% | 42% | 58% | 83% | 50% | 50% | |
| Peers Win Rate | 48% | 32% | 67% | 55% | 52% | 50% | |
| 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% | -9% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -1% | |
[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 2/27/2026 (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
Here are 1-3 brief analogies for Netflix:
The Spotify for movies and TV shows.
A global, internet-first HBO.
A digital Disney, focused solely on streaming entertainment.
AI Analysis | Feedback
- Streaming Service: Provides on-demand access to a vast library of movies, TV shows, documentaries, and specials, categorized as a Subscription Video On Demand (SVOD) service.
- Netflix Games: Offers a growing collection of mobile games accessible through the Netflix app, included as part of the streaming subscription and categorized as a Subscription Gaming Service.
AI Analysis | Feedback
Netflix (symbol: NFLX) primarily sells its streaming services directly to individual consumers rather than to other companies. Therefore, its major customers are its global subscriber base.
Netflix categorizes its individual customers in several ways for operational and strategic purposes. Two key categories are:
- Geographic Regions: Netflix segments its subscriber base and reports its financial performance by distinct geographic regions. These regions reflect differing market dynamics, content preferences, and regulatory environments. The primary segments include:
- U.S. and Canada (UCAN)
- Europe, Middle East, and Africa (EMEA)
- Latin America (LATAM)
- Asia-Pacific (APAC)
- Subscription Tiers: Customers are categorized by the specific plan they subscribe to, which offers varying features, content quality, number of concurrent streams, and price points. These tiers are designed to cater to different consumer needs and budgets. Common tiers include:
- Ad-Supported Plans (offering a lower price with advertisements)
- Standard Plans (offering ad-free streaming at a mid-tier price)
- Premium Plans (offering higher quality streaming, more concurrent streams, and potentially more features at a higher price)
AI Analysis | Feedback
- Amazon.com, Inc. (Symbol: AMZN)
AI Analysis | Feedback
Reed Hastings, Founder and Chairman
Reed Hastings co-founded Netflix in 1997. Prior to Netflix, he founded Pure Software in 1991, which he took public and sold in 1997. Pure Software merged with Atria Software in 1996 and was then acquired by Rational Software in 1997. He also previously served on the boards of Microsoft and Facebook.
Ted Sarandos, Co-CEO
Ted Sarandos joined Netflix in 2000 and has been instrumental in its evolution from a DVD rental service to a global streaming platform. His career in entertainment began in the video rental business, where he worked at a video store and later as a content buyer for Hollywood Video. He spearheaded Netflix's move into original programming, overseeing the creation of critically acclaimed series.
Greg Peters, Co-CEO
Greg Peters was named Co-CEO of Netflix in January 2023, after serving as Chief Operating Officer and Chief Product Officer. He joined Netflix in 2008. Before his time at Netflix, Peters held leadership roles including Senior Vice President of consumer electronics products for Macrovision Solutions Corp (later Rovi Corporation), and held positions at Mediabolic Inc., Red Hat Network, and Wine.com.
Spencer Neumann, Chief Financial Officer
Spencer Neumann joined Netflix as Chief Financial Officer in January 2019. Before Netflix, he served as CFO of Activision Blizzard from 2017 to 2018. Neumann also held numerous senior financial and strategic roles at The Walt Disney Company for over a decade, including CFO and Executive Vice President of Global Guest Experience of Walt Disney Parks and Resorts, Executive Vice President of the ABC Television Network, and CFO of the Walt Disney Internet Group. He also worked as a principal at the private equity firms Providence Equity Partners (2008-2011) and Summit Partners (2005-2007).
Bela Bajaria, Chief Content Officer
Bela Bajaria has served as Chief Content Officer since January 2023, overseeing Netflix's entire global slate of series across various regions.
AI Analysis | Feedback
The public company Netflix (NFLX) faces several key business risks in the evolving streaming landscape. These risks are primarily driven by an intensely competitive market, the escalating costs associated with content production, and challenges in sustaining subscriber growth and retention.
- Intensifying Competition and Subscriber Churn: Netflix operates in a fiercely competitive market with numerous rivals such as Disney+, HBO Max, Amazon Prime Video, and Apple TV+. This intense competition puts pressure on Netflix to continually invest in content and innovation to attract and retain subscribers, which can lead to increased subscriber churn. Data suggests a slowdown in Netflix's subscriber growth after an initial boost from its password-sharing crackdown, indicating market saturation and the impact of competition.
- Escalating Content Costs and Financial Pressures: To maintain its competitive edge and content leadership, Netflix consistently invests heavily in producing original content and licensing third-party programming. These content expenditures are substantial and continue to rise, potentially straining the company's financials and operating margins if subscriber growth or revenue expansion does not keep pace. The risk of a high-budget original content "flop" further contributes to potential financial losses.
- Challenges in Subscriber Growth and Retention: While Netflix's crackdown on password sharing initially led to a surge in new subscribers, it has also resulted in a negative perception among some users and may pose long-term risks to brand image. Additionally, Netflix's strategy of implementing regular price hikes, though necessary to cover rising costs, carries the risk of eroding consumer trust and potentially driving subscribers to more affordable or bundled competitor offerings, impacting overall subscriber retention.
AI Analysis | Feedback
The rapid growth and increasing sophistication of Free Ad-Supported Streaming TV (FAST) services. These platforms offer a completely free alternative to paid subscriptions, competing directly for viewer attention and potentially impacting subscriber acquisition and retention as consumers seek to reduce entertainment costs amid "subscription fatigue" and an oversaturated streaming market.
AI Analysis | Feedback
Netflix's main products and services operate within several significant addressable markets:
- Streaming (Subscription Video on Demand - SVOD): The global total addressable market for households with either fixed broadband access or Pay TV (excluding China) is estimated to be between 800 million and 900 million households. The global video streaming market was valued at approximately USD 674.25 billion in 2024 and is projected to grow to about USD 2,660.88 billion by 2032. Specifically, the U.S. video streaming market is anticipated to reach an estimated value of USD 610.59 billion by 2032.
- Advertising: Netflix's advertising business currently reaches over 190 million Monthly Active Viewers (MAVs) globally. This ad-supported service is considered a strategy to expand Netflix's overall addressable market.
- Gaming: The global gaming market size is valued at USD 269.06 billion in 2025 and is projected to reach USD 435.44 billion by 2030. The mobile gaming industry alone is predicted to be worth USD 272 billion by 2030.
AI Analysis | Feedback
Here are 3-5 expected drivers of future revenue growth for Netflix (NFLX) over the next 2-3 years:1. Expansion of the Ad-Supported Plan
Netflix's ad-supported subscription tier is proving to be a significant growth engine. The company has seen strong adoption, with this tier accounting for over 50% of sign-ups in countries where it's available in Q3 2024, and its membership base growing by 35% quarter-over-quarter. Netflix anticipates doubling its ad revenue in 2025, albeit from a smaller base, and expects to reach critical scale with its ad-supported member base in all ads countries in 2025. The company is also enhancing its ad technology and offering more sophisticated targeting options, which are expected to improve advertiser experience and sales.
2. Continued Monetization from Paid Sharing Initiatives
The crackdown on password sharing has successfully converted former freeloaders into paying subscribers, contributing to significant profit and revenue surges. This initiative led to a substantial influx of new subscribers, with 9.3 million additions in Q1 of the current year, bringing the global subscriber count to nearly 270 million. Analysts anticipate continued subscriber gains from this strategy for several more quarters.
3. Strategic Price Increases and Average Revenue Per Membership (ARM) Growth
Netflix has demonstrated pricing power, implementing price increases in various markets, such as a $2 increase for its most expensive streaming service and its lowest-priced ad-free plan in the U.S. in 2023. Analysts expect price hikes to continue in regions like the U.S. and Canada, contributing to an increase in Average Revenue Per Membership (ARM). The company's 2025 revenue guidance also factors in higher subscription pricing.
4. Diversification into Live Events and Gaming
Netflix is strategically investing in diverse entertainment offerings beyond traditional streaming, including live events and an expanded gaming strategy. The company's venture into live sports, such as NFL game streams and WWE programming, is expected to attract a broader audience, enhance subscriber retention, and drive engagement. While the direct revenue impact of gaming is still evolving, the strategy aims to boost engagement and retention by leveraging popular intellectual property, potentially contributing to subscriber acquisition and long-term revenue growth.
AI Analysis | Feedback
Share Repurchases
- Netflix authorized an additional $15 billion for its stock repurchase program in January 2025, raising the total available for buybacks to approximately $17.1 billion as of December 31, 2024.
- In 2024, the company repurchased 9.9 million shares for $6.2 billion.
- Netflix's ongoing capital allocation policy prioritizes returning excess cash to shareholders through share repurchases.
Share Issuance
- Netflix has focused on limiting share dilution and has experienced only modest dilution since its IPO.
- Net common equity issued/repurchased for the twelve months ending September 30, 2025, was -$19.742 billion, indicating net repurchases.
- A 10-for-1 stock split was approved in October 2025, effective November 17, 2025, to make shares more accessible to employees.
Outbound Investments
- Netflix has made 13 acquisitions, with peak activity in 2021 (3 acquisitions) and 2022 (5 acquisitions), primarily in mobile gaming, PC & console gaming, and content/VFX studios.
- Recent acquisitions include Thinkin (March 2024), Spryfox (October 2022), Animal Logic (July 2022), and Next Games ($72.7 million, March 2022).
- The company's strategy involves investing in new growth initiatives such as gaming.
Capital Expenditures
- Netflix's capital expenditures for physical assets averaged $443.7 million annually from 2020 to 2024, with the latest twelve months (as of September 2025) at $607.6 million.
- The company treats original content as capital expenditure, with an expected content spend of $18 billion in 2025, focusing on major original series, live content, and global-local productions.
- Netflix committed over €1.14 billion (approximately $1.25 billion USD) towards content production and infrastructure in Spain through 2028.
Latest Trefis Analyses
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|---|---|---|
| DASHBOARDS | ||
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| Netflix Stock Dropped -30%, Here’s Why | 02/12/2026 | |
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Trade Ideas
Select ideas related to NFLX.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 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 | 6.2% | 6.2% | -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 | 5.2% | 5.2% | 0.0% |
| 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 | 22.1% | 22.1% | -3.7% |
| 02062026 | MGNI | Magnite | 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 | 20.6% | 20.6% | -0.8% |
| 01302026 | RBLX | Roblox | 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 | 4.4% | 4.4% | -7.9% |
| 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
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 101.14 |
| Mkt Cap | 298.2 |
| 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 | 8.0% |
| 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 | 0.2% |
| CFO/Rev LTM | 21.0% |
| CFO/Rev 3Y Avg | 19.2% |
| FCF/Rev LTM | 13.2% |
| FCF/Rev 3Y Avg | 12.2% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 298.2 |
| P/S | 2.6 |
| P/EBIT | 20.8 |
| P/E | 31.0 |
| P/CFO | 14.7 |
| Total Yield | 3.4% |
| Dividend Yield | 0.2% |
| FCF Yield 3Y Avg | 3.6% |
| D/E | 0.2 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 2.1% |
| 3M Rtn | -1.5% |
| 6M Rtn | -4.5% |
| 12M Rtn | -1.5% |
| 3Y Rtn | 84.3% |
| 1M Excs Rtn | 3.3% |
| 3M Excs Rtn | -2.3% |
| 6M Excs Rtn | -10.4% |
| 12M Excs Rtn | -17.6% |
| 3Y Excs Rtn | 9.0% |
Comparison Analyses
Price Behavior
| Market Price | $96.24 | |
| Market Cap ($ Bil) | 407.0 | |
| First Trading Date | 05/23/2002 | |
| Distance from 52W High | -28.1% | |
| 50 Days | 200 Days | |
| DMA Price | $86.35 | $110.14 |
| DMA Trend | down | down |
| Distance from DMA | 11.5% | -12.6% |
| 3M | 1YR | |
| Volatility | 42.3% | 36.4% |
| Downside Capture | 31.41 | 76.97 |
| Upside Capture | -41.09 | 63.00 |
| Correlation (SPY) | 18.6% | 45.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 1.35 | 0.63 | 0.26 | 0.46 | 0.77 | 0.98 |
| Up Beta | 1.19 | 0.73 | 0.81 | 0.66 | 0.83 | 0.82 |
| Down Beta | 2.26 | 1.03 | 0.65 | 0.50 | 0.78 | 0.85 |
| Up Capture | 232% | 54% | -37% | 2% | 52% | 203% |
| Bmk +ve Days | 9 | 20 | 31 | 70 | 142 | 431 |
| Stock +ve Days | 13 | 17 | 27 | 56 | 126 | 391 |
| Down Capture | 5% | 36% | 33% | 79% | 84% | 102% |
| Bmk -ve Days | 12 | 21 | 30 | 54 | 109 | 320 |
| Stock -ve Days | 8 | 24 | 34 | 68 | 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 | -2.8% | 36.3% | -0.01 | - |
| Sector ETF (XLC) | 17.4% | 18.8% | 0.72 | 49.2% |
| Equity (SPY) | 16.5% | 19.4% | 0.66 | 41.3% |
| Gold (GLD) | 81.3% | 25.7% | 2.29 | 5.1% |
| Commodities (DBC) | 13.4% | 16.9% | 0.58 | 14.9% |
| Real Estate (VNQ) | 7.3% | 16.6% | 0.25 | 21.9% |
| Bitcoin (BTCUSD) | -22.0% | 44.9% | -0.42 | 22.9% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with NFLX | |
|---|---|---|---|---|
| NFLX | 12.5% | 43.1% | 0.42 | - |
| Sector ETF (XLC) | 11.4% | 20.8% | 0.46 | 59.0% |
| Equity (SPY) | 13.6% | 17.0% | 0.63 | 49.3% |
| Gold (GLD) | 23.5% | 17.1% | 1.12 | 8.1% |
| Commodities (DBC) | 10.6% | 19.0% | 0.44 | 7.9% |
| Real Estate (VNQ) | 5.1% | 18.8% | 0.18 | 24.3% |
| Bitcoin (BTCUSD) | 4.0% | 57.0% | 0.29 | 25.1% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with NFLX | |
|---|---|---|---|---|
| NFLX | 26.9% | 41.7% | 0.72 | - |
| Sector ETF (XLC) | 9.7% | 22.4% | 0.53 | 60.3% |
| Equity (SPY) | 15.4% | 17.9% | 0.74 | 48.1% |
| Gold (GLD) | 15.3% | 15.6% | 0.82 | 6.6% |
| Commodities (DBC) | 8.7% | 17.6% | 0.41 | 12.5% |
| Real Estate (VNQ) | 6.6% | 20.7% | 0.28 | 23.4% |
| Bitcoin (BTCUSD) | 65.8% | 66.8% | 1.05 | 14.7% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
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 |
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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