Netflix, Inc. (NFLX) Intrinsic Value & DCF Valuation
Entertainment · NASDAQ
Current Price
$73.63
Intrinsic Value
$87.53
+15.9% margin of safety
What Is Netflix, Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Netflix, Inc. (NFLX) at $87.53 per share, compared with a market price of $73.63, a margin of safety of +15.9%. The base case assumes 10.1% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $73.06 to $103.98. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Netflix, Inc. (NFLX) Undervalued?
At $73.63, NFLX trades about 15.9% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Global Brand Recognition & Scale
Netflix's globally recognized brand and massive subscriber base create significant economies of scale in content production and distribution. This scale deters new entrants and allows for substantial investment in original programming.
↑Content Library & Data Advantage
A vast and diverse content library, continuously enriched by proprietary data on viewer preferences, provides a strong competitive edge. This data informs content acquisition and creation, leading to more engaging user experiences.
↑First-Mover Advantage & Ecosystem
As an early pioneer in streaming, Netflix built a robust platform and user habit. This established ecosystem fosters customer loyalty and makes switching to competitors less appealing.
INVESTMENT RISKS
↓Subscriber Growth Saturation
Mature markets may be approaching saturation, making sustained subscriber growth increasingly challenging. This could lead to slower revenue expansion and pressure on profitability.
↓Content Cost Inflation
The ongoing bidding war for talent and intellectual property drives up content production and licensing costs. This can erode profit margins if not offset by price increases or subscriber growth.
↓Regulatory Scrutiny & Geopolitical Factors
Netflix operates globally and faces potential regulatory changes regarding content, data privacy, and market access. Geopolitical tensions can also impact international operations and subscriber bases.
Base case
NFLX base case valuation
Intrinsic Value
$87.53
Margin of safety
+15.9%
Expected annual return
+3.5%
Base case assumptions: 10.1% annual growth, 10.0% discount rate, 28x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the NFLX valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Netflix, Inc. respond.
Open DCF Calculator for NFLXCompany Overview
Netflix, Inc. serves as a worldwide entertainment provider. Its comprehensive library features television series, motion pictures, documentaries, and mobile games, spanning numerous genres and languages. Members can effortlessly stream this content through a variety of internet-connected devices, including smart TVs, digital media players, cable boxes, and mobile phones. Furthermore, the company continues to offer a DVD-by-mail subscription service to its customers in the United States. With roughly 222 million paying subscribers distributed across 190 countries, Netflix was founded in 1997 and is headquartered in Los Gatos, California.
Financial Metrics — NFLX Stock Valuation Data
Revenue/Share (TTM)
$11.55
FCF/Share (TTM)
$2.62
ROIC (TTM)
24.3%
ROE (TTM)
48.0%
P/FCF
27.9x
EV/EBITDA
10.2x
FCF Yield
3.59%
Debt/Equity
0.47x
Based on trailing twelve-month data, NFLX shows a free cash flow per share of $2.62 and a ROIC of 24.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 27.9x and FCF yield of 3.59% are important context metrics when evaluating NFLX's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of NFLX?
Netflix, Inc. currently generates $2.62 in free cash flow per share. At the current price of $73.63, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is NFLX undervalued?
NFLX trades at a P/FCF ratio of 27.9x with a free cash flow yield of 3.59%. This P/FCF is in a moderate range. However, whether NFLX is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value NFLX stock using DCF?
To perform a DCF valuation on Netflix, Inc.: (1) Start with the trailing free cash flow per share ($2.62) as the base, (2) project future FCF growth over 5-10 years based on Entertainment industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting NFLX's risk profile — with a debt-to-equity of 0.47x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to NFLX?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Netflix, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Entertainment trends, then discounting those amounts to today's dollars. NFLX's ROIC of 24.3% reflects how efficiently the company converts invested capital into profit.
How does WACC affect NFLX stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NFLX, with a debt-to-equity ratio of 0.47x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 10.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See NFLX PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Communication Services valuationsDCF and P/E value NFLX with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.