NFLX
Netflix, Inc.$98.66
Unclear
Target $95.07
Report: Mar 07, 2026Communication Services • Entertainment • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$98.66-3.6%
Rec: UnclearConviction: High
Entry Target
$73.13
(26% below current)
Fair Value
$95.07
(4% below current)
Stop Loss
$75.01
(24% below current)
Position Size
Half
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$134.12
52 Week Low$75.01
Avg. 3 Month Volume48.93M
Efficiency
LTM Gross Margin48.5%
LTM EBITDA Margin67.0%
LTM EBIT Margin29.9%
LTM Operating Margin29.5%
LTM ROA20.4%
LTM ROE43.3%
LTM ROIC75.5%
LTM ROCE30.8%
Capital Structure
Market Cap (MM)$406.0B
Enterprise Value (MM)$411.4B
Shares Outstanding4.23B
Total Debt (MM)$14.46B
Cash & Equivalents (MM)$9.03B
LTM Net Debt (MM)$5.43B
LTM Net Debt/EBITDA0.2x
Growth
TTM Rev. Growth15.9%
Last 3-Yr Rev. CAGR12.6%
Last 3-Yr EBITDA CAGR14.2%
Last 3-Yr EPS CAGR36.8%
Valuation
Street Target Price$117.25
LTM EV/Revenue9.1x
LTM EV/Gross Profit18.8x
LTM EV/EBIT30.5x
LTM EV/EBITDA13.6x
LTM P/E37.0x
LTM EV/FCF43.5x
LTM P/FCF42.9x
LTM P/TB17.8x
LTM P/B15.3x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $98.66 versus fair value $95.07 (-3.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Scaling of Ad-Supported Revenue to $3 Billion in 2026. Bear case centers on Moat Erosion due to Competitive Bundling. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The ad-supported tier is scaling faster than anticipated, with monthly active users reaching 40 million and revenue expected to hit $3 billion in 2026. Operating margins are guided to expand to 31.5% in 2026, driven by ad-tier leverage and disciplined content spend.
Bear Case
Heavy insider selling, totaling $757 million in the last 12 months with zero purchases, suggests management may view the stock as fully valued. Content cost inflation remains a threat, with a projected 10% increase in 2026 spending potentially crimping free cash flow.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Scaling of Ad-Supported Revenue to $3 Billion in 2026. This catalyst addresses market concerns regarding the ceiling on subscriber growth by...
Near-Term (0-6 months)Impact: Moderate
Successful Execution of Live Event Programming (e.g., NFL, WWE). Live events drive high engagement and provide a unique value proposition th...
Long-Term (18+ months)Impact: Moderate
Netflix is highly relevant at this moment due to the recent $2.8 billion cash windfall from the WBD termination and the stock's current posi...
Primary Risks
Concern: Medium
Moat Erosion due to Competitive Bundling. If competitors like Disney and Amazon successfully bundle their services at a significant discount...
Concern: Low
Content Cost Inflation Outpacing Revenue Growth. A projected 10% increase in content spending in 2026 could compress margins if ad-tier scal...
Concern: Medium
The stewardship verdict is adequate, though tempered by weak insider ownership and heavy selling. Following the WBD merger termination, we s...
Recent Activity
2026-02-27SEC Filing (8-K)
+13.77%Netflix terminates Warner Bros. Discovery merger agreement and receives $2.8B termination fee.
2026-02-25Press Release
+5.97%Warner Bros. Discovery Board Of Directors Determines Revised Proposal From Paramount Skydance Could Reasonably Be Expected To Lead To A "Company Superior Proposal"
2025-10-22SEC Filing (8-K)
-10.07%Netflix reports Q3 2025 revenue growth of 17%, operating margin of 28%, and strong engagement with record TV view share in US and UK.
2025-07-18SEC Filing (8-K)
-5.10%Netflix reports Q2 2025 results with 16% revenue growth and 34% operating margin
2025-03-06Analyst Target
-8.53%Firm: UBS Price Target: $90.47 Price When Posted: $90.64 Implied Downside: -0.2%
Valuation Table
9.8/10Decision Grade
Scenario Range
$86
Bear
$3
Base
$130
Bull
$99