Netflix, Inc. (NFLX) Stock Valuation — PE Analysis
Entertainment · NASDAQ
Current Price
$80.34
PE Ratio (TTM)
25.4x
Intrinsic Value
$139.45
+42.4% margin of safety
COMPETITIVE MOAT
↑Global Brand Recognition
Netflix's brand is synonymous with streaming worldwide. This strong recognition drives subscriber acquisition and retention, creating a significant barrier to entry for new competitors.
↑Vast Content Library
The sheer volume and diversity of Netflix's content library, including exclusive originals, are a major draw for consumers. This deep catalog makes it difficult for rivals to replicate the same breadth of appeal.
↑Data-Driven Content Strategy
Netflix leverages extensive user data to inform content creation and acquisition. This allows for more targeted and successful programming, increasing engagement and reducing churn.
INVESTMENT RISKS
↓Intensifying Competition
The streaming landscape is increasingly crowded with deep-pocketed rivals like Disney+, Max, and Amazon Prime Video. This competition pressures subscriber growth and content spending.
↓Content Production Volatility
Netflix's reliance on original content means its success is tied to the unpredictable nature of hit-making. A string of misses, as seen with some film releases, can impact subscriber sentiment.
↓Subscriber Growth Saturation
Achieving significant further subscriber growth, especially in mature markets, is becoming more challenging. The pursuit of a trillion-dollar valuation requires substantial, sustained expansion.
Base case
NFLX base case PE valuation
A base case PE valuation for NFLX estimates a fair value of about $139.45 per share, against a current price of $80.34. The model assumes 19.3% annual earnings growth, a 25x target PE multiple, and a 10% discount rate.
Intrinsic Value
$139.45
Margin of safety
+42.4%
Expected annual return
+11.7%
Base case assumptions: 19.3% annual earnings growth, 25x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the NFLX PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Netflix, Inc. respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
25.4x
PEG Ratio
0.56
Earnings Yield
3.94%
ROE (TTM)
49.2%
Revenue/Share (TTM)
$11.10
Debt/Equity
0.54x
Frequently Asked Questions
What is the PE ratio of NFLX?
The trailing twelve-month PE ratio of NFLX reflects how much investors pay per dollar of Netflix, Inc.'s earnings. This metric is most useful when compared to Entertainment peers and the company's own historical range.
Is NFLX overvalued based on PE ratio?
NFLX's PE of 25.4x combined with a PEG ratio of 0.56 provides a growth-adjusted perspective. A PEG below 1.0 suggests NFLX may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Entertainment, a DCF analysis may be more appropriate.
How do I value NFLX stock using PE ratio?
To value Netflix, Inc. using PE: (1) Compare the current PE (25.4x) against the Entertainment median to assess relative pricing, (2) check the PEG ratio (0.56) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of NFLX?
NFLX's PEG ratio is 0.56, calculated by dividing the PE ratio (25.4x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for NFLX stock valuation?
PE ratio gives a quick relative read — how NFLX is priced versus Entertainment peers. DCF provides an absolute value based on projected free cash flows. For NFLX, with a strong ROE of 49.2%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See NFLX DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Communication Services valuationsP/E and DCF value NFLX with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.