# Netflix (NFLX.US)

Canonical: https://gigainvestors.com/s/NFLX

Analysis as of: 2026-10-16T07:30:35.386Z. Financial observations: FY2002–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $72.61 per share; close as of 2026-10-15.

Estimated value: low $23.61 per share, central $26.59 per share, high $30.57 per share. Buy at or below the central value $26.59 per share. Valuation as of 2026-10-16T07:30:35.386Z; scenarios are not confidence intervals.

Expected annual return: 5.4% at the stated quote. About 5.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- Positive operating margins follow a sustained upward trend (at least 90% explained, low residual variation), with no net losses or latest decline; improvement passes the margin-variation check

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.38×

- Sustained margin improvement: Yes

- Variation explained by rising trend: 93.7%

- Variation around the rising trend: 0.10×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.07×

- FY2018: 0.10×

- FY2019: 0.13×

- FY2020: 0.18×

- FY2021: 0.21×

- FY2022: 0.18×

- FY2023: 0.21×

- FY2024: 0.27×

- FY2025: 0.29×

- LTM to Jun 2026: 0.30×

### moat: pass

- ROIC, median of available years: 18.6%

- ROIC, second-lowest year: 11.1%

- Typical minus recent gross margin: -6.9 pp

- Typical gross margin (annual median): 39.1%

- Recent gross margin (lower of latest and 3-year median): 46.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.4%

- ROIC including acquisitions, ten-year median: 0.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 6.0%

- FY2017: 11.1%

- FY2018: 12.9%

- FY2019: 13.0%

- FY2020: 20.6%

- FY2021: 21.5%

- FY2022: 16.5%

- FY2023: 22.9%

- FY2024: 29.6%

- FY2025: 35.9%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.66×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $23B

- Net income, five-year total: $35B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -4.0 pp

- Working capital / revenue, change between three-year averages: -31.3 pp

- Working capital / revenue, final three-year average: 3.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: -0.10×

- FY2022: 0.23×

- FY2023: 1.22×

- FY2024: 0.76×

- FY2025: 0.83×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 11.1% vs 29.6%

- Per-share earnings: 0.04 to 1.98 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.0%

- Ordinary dilution, 5-year annual growth: -0.9%

- Market cap gain: $343B

- Cumulative retained earnings: $41B

- Diluted shares, 10-year annual growth: -0.0%

- Diluted shares, 5-year annual growth: -0.9%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 61.6%

- Per-share value change: $1.94

- Per-share value, starting three-year median: $0.04

- Per-share value, ending three-year median: $1.98

- Buybacks concentrated in cheaper years (correlation): 0.80

- Average buyback yield: 1.8%

- Buyback history: 4 years

- Debt-funded buybacks: No

- Acquisition spending: $30B

- Cumulative net income, 10 years: $41B

- ROIC, first three-year median: 11.1%

- ROIC, last three-year median: 29.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.04

- FY2017: $0.13

- FY2018: $0.27

- FY2019: $0.41

- FY2020: $0.61

- FY2021: $1.12

- FY2022: $1.00

- FY2023: $1.20

- FY2024: $1.98

- FY2025: $2.53

### accounting: pass

- Sloan accruals: 1.5%

- Receivables to sales index (DSRI): 1.12×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 3.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.92×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.23×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 12.2%

- FY2017: 12.3%

- FY2018: 15.0%

- FY2019: 14.0%

- FY2020: 0.9%

- FY2021: 10.6%

- FY2022: 5.1%

- FY2023: -3.8%

- FY2024: 2.5%

- FY2025: 1.5%

## Holders

- [Steven Romick](https://gigainvestors.com/FPA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Terry Smith](https://gigainvestors.com/FS): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Josh Tarasoff](https://gigainvestors.com/GLC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Russo](https://gigainvestors.com/GR): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Ruane](https://gigainvestors.com/RC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Wallace Weitz](https://gigainvestors.com/WIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Ackman](https://gigainvestors.com/psc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 46% since Jun 2025 · "Netflix Q2 Earnings Beat, Stock Falls on Revenue Miss, Lower Outlook" (finance.yahoo.com, Jul 2026) · sales +7.1%

Story as of 2026-10-16T09:59:15.344Z; price observation 2026-10-15.

Price needs cash profits to grow 14.2% a year for ten years

- 2025-04-17: Netflix earnings top estimates, issues upbeat Q2 guidance ([finance.yahoo.com](https://finance.yahoo.com/video/netflix-earnings-top-estimates-issues-201249671.html))

- 2025-07-18: Netflix Beats Earnings Expectations as Revenue Surges 16%, but Stock Slips on Margin Warning ([finance.yahoo.com](https://finance.yahoo.com/news/netflix-beats-earnings-expectations-revenue-213106117.html))

- 2026-01-20: Netflix falls afterhours on soft guidance amid slower growth ahead ([finance.yahoo.com](https://finance.yahoo.com/news/netflix-falls-afterhours-soft-guidance-222716526.html))

- 2026-02-28: Netflix Walks From Warner Deal To Refocus On Cash And Content ([finance.yahoo.com](https://finance.yahoo.com/news/netflix-walks-warner-deal-refocus-011510519.html))

- 2026-08-10: Netflix (NFLX) Wraps Upfront Ad Sales With Commitments Nearly Doubling ([finance.yahoo.com](https://finance.yahoo.com/media-advertising/articles/netflix-nflx-wraps-upfront-ad-221026684.html))

- 2026-09-18: Wells Fargo cuts Netflix rating on engagement risk, weak slate ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/wells-fargo-cuts-netflix-rating-120836104.html))

### Sales · FY2025–2026

sales +7.1%; source https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm; observed 2026-01-23.

- FY2017: $12B 

- FY2018: $16B 

- FY2019: $20B 

- FY2020: $25B 

- FY2021: $30B 

- FY2022: $32B 

- FY2023: $34B 

- FY2024: $39B 

- FY2025: $45B 

- FY2026: $48B 

### Gross margin · FY2025

gross margin 48.5%; source https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm; observed 2026-01-23.

- FY2016: 31.7% 

- FY2017: 34.5% 

- FY2018: 36.9% 

- FY2019: 38.3% 

- FY2020: 38.9% 

- FY2021: 41.6% 

- FY2022: 39.4% 

- FY2023: 41.5% 

- FY2024: 46.1% 

- FY2025: 48.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in entertainment; annual sales are USD 45.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm (filed 2026-01-23); FY2025: revenue 45183036000; grossProfit 21907707000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NFLX.US: Netflix, Inc. provides entertainment services worldwide. The company offers television (TV) series, documentaries, feature films, games, and live programming across various genres and languages. It also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices. Netflix, Inc. was incorporated in 1997 and is headquartered in Los Gatos, California.

### Why customers stay

Margins ranged from 41.5% to 48.5% during 2023–25; it earns 18.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); FY2023: grossProfit / revenue = 41.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); FY2024: grossProfit / revenue = 46.1%.

- Source: https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm (filed 2026-01-23); FY2025: grossProfit / revenue = 48.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); 10-year return on capital observations [[2016,0.06037269286775211],[2017,0.11073636176984561],[2018,0.1290791144297734],[2019,0.12978094941475746],[2020,0.20646279760803302],[2021,0.2152230017316992],[2022,0.16533843207719848],[2023,0.22857114401977582],[2024,0.2962243474128154],[2025,0.3592762177506294]]; median 0.18590061484261575. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid no dividends in 10 years; bought back USD 9.1 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); FY2020: growth capex 0; upkeep 497923000; owner earnings 1513974000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); FY2022: growth capex 0; upkeep 407729000; owner earnings 1043076000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); FY2023: growth capex 0; upkeep 348552000; owner earnings 6586381000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); FY2024: growth capex 0; upkeep 439538000; owner earnings 6649238000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm (filed 2026-01-23); FY2025: growth capex 0; upkeep 688220000; owner earnings 9092604000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm (filed 2026-01-23); FY2025: cash repurchases 9127167000 USD.

### Are managers owners

Insiders own 0.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NFLX.US SharesStats.PercentInsiders = 0.5720000000000001 percentage points; cache date 2026-10-16.

### What could break it

"We have a substantial amount of indebtedness and other obligations" (SEC filing, Jan 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm (filed 2026-01-23); We have a substantial amount of indebtedness and other obligations

### What the price says

The price assumes cash profits grow 14.2% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-23); Ten-year compound average after fade. Initial solved rate 0.19248424794257624. Price 72.61; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.23905502501970416 → FY2025 2.0932068990205264. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $12.49 per share

- 2016-11: $11.70 per share

- 2016-12: $12.38 per share

- 2017-01: $14.07 per share

- 2017-02: $14.21 per share

- 2017-03: $14.78 per share

- 2017-04: $15.22 per share

- 2017-05: $16.31 per share

- 2017-06: $14.94 per share

- 2017-07: $18.17 per share

- 2017-08: $17.47 per share

- 2017-09: $18.13 per share

- 2017-10: $19.64 per share

- 2017-11: $18.76 per share

- 2017-12: $19.20 per share

- 2018-01: $27.03 per share

- 2018-02: $29.14 per share

- 2018-03: $29.54 per share

- 2018-04: $31.25 per share

- 2018-05: $35.16 per share

- 2018-06: $39.14 per share

- 2018-07: $33.75 per share

- 2018-08: $36.77 per share

- 2018-09: $37.41 per share

- 2018-10: $30.18 per share

- 2018-11: $28.61 per share

- 2018-12: $26.77 per share

- 2019-01: $33.95 per share

- 2019-02: $35.81 per share

- 2019-03: $35.66 per share

- 2019-04: $37.05 per share

- 2019-05: $34.33 per share

- 2019-06: $36.73 per share

- 2019-07: $32.30 per share

- 2019-08: $29.38 per share

- 2019-09: $26.76 per share

- 2019-10: $28.74 per share

- 2019-11: $31.47 per share

- 2019-12: $32.36 per share

- 2020-01: $34.51 per share

- 2020-02: $36.90 per share

- 2020-03: $37.55 per share

- 2020-04: $41.99 per share

- 2020-05: $41.97 per share

- 2020-06: $45.50 per share

- 2020-07: $48.89 per share

- 2020-08: $52.96 per share

- 2020-09: $50.00 per share

- 2020-10: $47.57 per share

- 2020-11: $49.07 per share

- 2020-12: $54.07 per share

- 2021-01: $53.24 per share

- 2021-02: $53.89 per share

- 2021-03: $52.17 per share

- 2021-04: $51.35 per share

- 2021-05: $50.28 per share

- 2021-06: $52.82 per share

- 2021-07: $51.76 per share

- 2021-08: $56.92 per share

- 2021-09: $61.03 per share

- 2021-10: $69.03 per share

- 2021-11: $64.19 per share

- 2021-12: $60.24 per share

- 2022-01: $42.71 per share

- 2022-02: $39.45 per share

- 2022-03: $37.46 per share

- 2022-04: $19.04 per share

- 2022-05: $19.74 per share

- 2022-06: $17.49 per share

- 2022-07: $22.49 per share

- 2022-08: $22.36 per share

- 2022-09: $23.54 per share

- 2022-10: $29.19 per share

- 2022-11: $30.55 per share

- 2022-12: $29.49 per share

- 2023-01: $35.39 per share

- 2023-02: $32.21 per share

- 2023-03: $34.55 per share

- 2023-04: $32.99 per share

- 2023-05: $39.52 per share

- 2023-06: $44.05 per share

- 2023-07: $43.90 per share

- 2023-08: $43.37 per share

- 2023-09: $37.76 per share

- 2023-10: $41.17 per share

- 2023-11: $47.40 per share

- 2023-12: $48.69 per share

- 2024-01: $56.41 per share

- 2024-02: $60.29 per share

- 2024-03: $60.73 per share

- 2024-04: $55.06 per share

- 2024-05: $64.16 per share

- 2024-06: $67.49 per share

- 2024-07: $62.84 per share

- 2024-08: $70.14 per share

- 2024-09: $70.93 per share

- 2024-10: $75.60 per share

- 2024-11: $88.68 per share

- 2024-12: $89.13 per share

- 2025-01: $97.68 per share

- 2025-02: $98.06 per share

- 2025-03: $93.25 per share

- 2025-04: $113.17 per share

- 2025-05: $120.72 per share

- 2025-06: $133.91 per share

- 2025-07: $115.94 per share

- 2025-08: $120.83 per share

- 2025-09: $119.89 per share

- 2025-10: $111.89 per share

- 2025-11: $107.58 per share

- 2025-12: $93.76 per share

- 2026-01: $83.49 per share

- 2026-02: $96.24 per share

- 2026-03: $96.15 per share

- 2026-04: $93.61 per share

- 2026-05: $86.02 per share

- 2026-06: $71.40 per share

- 2026-07: $71.71 per share

- 2026-08: $81.05 per share

- 2026-09: $69.58 per share

- 2026-10: $70.46 per share

## Annual estimated value (USD per share)

- FY2023: low $4.14 per share, central $4.52 per share, high $5.01 per share

- FY2024: low $7.88 per share, central $8.69 per share, high $9.77 per share

- FY2025: low $21.26 per share, central $23.93 per share, high $27.49 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:36:19.198Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1065280/000106528026000034/nflx-20251231.htm); period 2025-12-31, filed 2026-01-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.