Netflix Inc (NASDAQ: NFLX)

Sector: Communication Services Industry: Entertainment CIK: 0001065280
Market Cap 349.87 Bn
P/B 13.15
P/E 31.86
P/S 7.74
ROIC (Qtr) 28.58
Div Yield % 0.00
Rev 1y % (Qtr) 17.61
Total Debt (Qtr) 14.46 Bn
Debt/Equity (Qtr) 0.54

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 10.15B provides robust 0.70x coverage of total debt 14.46B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 9.03B provide 9.04x coverage of short-term debt 998.87M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 10.15B provides strong 27.55x coverage of stock compensation 368.45M, indicating sustainable incentive practices.
  • Operating cash flow of 10.15B provides exceptional 13.07x coverage of interest expenses 776.51M, showing strong debt service capability.
  • Robust free cash flow of 9.46B exceeds capital expenditure of 688.22M by 13.75x, indicating strong organic growth funding capability.

Bear case

  • Investment activities of 1.04B provide weak support for R&D spending of 3.39B, which is 0.31x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 9.03B provide limited coverage of acquisition spending of (17.19M), which is -525.40x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 13.50B show weak coverage of depreciation charges of 16.76B, with a 0.81 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 16.76B relative to operating cash flow of 10.15B, which is 1.65x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 9.46B represents just -5.16x of debt issuance (1.83B), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 349.87 Bn 31.86 7.74 14.46 Bn
2 DIS Walt Disney Co 195.56 Bn 15.96 2.04 46.64 Bn
3 WBD Warner Bros. Discovery, Inc. 66.35 Bn 136.80 1.75 33.52 Bn
4 FWONA Liberty Media Corp 46.91 Bn -352.74 11.61 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 32.65 Bn 101.32 1.33 9.39 Bn
6 FOXA Fox Corp 29.03 Bn 15.35 1.75 6.60 Bn
7 TKO TKO Group Holdings, Inc. 17.65 Bn -220.73 5.07 4.04 Bn
8 WMG Warner Music Group Corp. 15.37 Bn 768.35 4.64 4.61 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 6.39 1.60
EV to Cash from Ops. EV/CFO 34.98 74.22
EV to Debt EV to Debt 24.55 109.74
EV to EBIT EV/EBIT 26.30 24.34
EV to EBITDA EV/EBITDA 11.80 31.84
EV to Free Cash Flow [EV/FCF] EV/FCF 37.53 -338.96
EV to Market Cap EV to Market Cap 1.01 62.35
EV to Revenue EV/Rev 7.86 9.43
Price to Book Value [P/B] P/B 13.15 3.87
Price to Earnings [P/E] P/E 31.86 -61.07
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.25
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -16.52
Dividend per Basic Share Div per Share (Qtr) 0.00 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.95
Interest Coverage Int. cover (Qtr) 17.38 -7.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -56.58 -46.16
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.75 2,379.93
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 24.75 -74.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 15.49 3.12
EBIT Growth (1y) % EBIT 1y % (Qtr) 26.34 -56.93
EBT Growth (1y) % EBT 1y % (Qtr) 27.66 11.72
EPS Growth (1y) % EPS 1y % (Qtr) 27.09 23.88
FCF Growth (1y) % FCF 1y % (Qtr) 36.68 -92.46
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 21.96 0.48
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.81 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 0.82 0.48
Current Ratio Curr Ratio (Qtr) 1.19 1.22
Debt to Equity Ratio Debt/Equity (Qtr) 0.54 1.03
Interest Cover Ratio Int Coverage (Qtr) 17.38 -7.86
Times Interest Earned Times Interest Earned (Qtr) 17.38 -7.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 67.00 -64.95
EBIT Margin % EBIT Margin % (Qtr) 29.88 -79.29
EBT Margin % EBT Margin % (Qtr) 28.16 -82.30
Gross Margin % Gross Margin % (Qtr) 48.50 35.55
Net Profit Margin % Net Margin % (Qtr) 24.30 -82.96