DCF Studio

    NFLX · NMS · Communication Services

    Netflix, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 107.25

    Market price

    USD 62.34

    Implied upside

    +72.0%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 107.25+72.0%
    Exit multiple
    USD 103.32+65.7%
    Market price
    USD 62.34

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn24bn49bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 51.1bnUSD 56.6bnUSD 62.1bnUSD 67.5bnUSD 72.6bnUSD 77.4bnUSD 81.7bnUSD 85.4bnUSD 88.5bnUSD 90.7bn+6.6%
    EBITUSD 12.1bnUSD 13.4bnUSD 14.7bnUSD 16.0bnUSD 17.2bnUSD 18.3bnUSD 19.3bnUSD 20.2bnUSD 20.9bnUSD 21.5bn+6.6%
    NOPATUSD 10.5bnUSD 11.6bnUSD 12.7bnUSD 13.8bnUSD 14.9bnUSD 15.9bnUSD 16.8bnUSD 17.5bnUSD 18.2bnUSD 18.6bn+6.6%
    Add depreciation & amortisationUSD 21.2bnUSD 23.5bnUSD 25.7bnUSD 28.0bnUSD 30.1bnUSD 32.1bnUSD 33.9bnUSD 35.4bnUSD 36.7bnUSD 37.6bn+6.6%
    Less capital expenditureUSD -635.7mUSD -1.1bnUSD -1.7bnUSD -2.3bnUSD -3.1bnUSD -3.9bnUSD -4.7bnUSD -5.5bnUSD -6.4bnUSD -7.2bn+31.0%
    Capex, % of revenue1.2%2.0%2.7%3.5%4.2%5.0%5.7%6.5%7.2%8.0%-
    Less increase in working capitalUSD -80.7mUSD -74.4mUSD -74.5mUSD -73.0mUSD -69.9mUSD -65.2mUSD -58.7mUSD -50.5mUSD -40.9mUSD -30.0m-10.4%
    Free cashflow to firmUSD 31.0bnUSD 33.9bnUSD 36.7bnUSD 39.4bnUSD 41.8bnUSD 44.0bnUSD 45.9bnUSD 47.4bnUSD 48.4bnUSD 48.9bn+5.2%
    Discount factor0.95130.86080.77890.70480.63780.57710.52220.47250.42760.3869-
    Present valueUSD 29.5bnUSD 29.2bnUSD 28.6bnUSD 27.8bnUSD 26.7bnUSD 25.4bnUSD 24.0bnUSD 22.4bnUSD 20.7bnUSD 18.9bn-
    Present Value Of The ForecastUSD 253.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.406Reported 1.606, pulled toward 1.0 (Blume)
    Cost of equity10.84%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 17.2x interest cover. Book interest / average debt was lower, at 5.2%.
    Market capitalisationUSD 259.6bn94.7% of capital
    Total debtUSD 14.5bn5.3% of capital, book value as a proxy
    Tax rate13.3%Effective, capped at statutory
    WACC10.51%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 107.25

    46% of EV

    Forecast FCFF, final year
    USD 48.9bn
    Capex at depreciation, working capital in reinvestment
    USD 50.5bn
    Less reinvestment at g/ROIC (12.6% of NOPAT)
    USD -6.4bn
    Capitalised
    USD 44.1bn
    ROIC (reported)
    19.8%
    Terminal value, undiscounted
    USD 564.1bn
    Terminal value, discounted
    USD 218.2bn
    Enterprise value
    USD 471.3bn
    Less net debt
    USD 5.4bn
    Equity value
    USD 465.9bn

    Exit at 8.8x EBITDA

    Value per shareUSD 103.32

    44% of EV

    Terminal value, undiscounted
    USD 519.9bn
    Terminal value, discounted
    USD 201.2bn
    Enterprise value
    USD 454.2bn
    Less net debt
    USD 5.4bn
    Equity value
    USD 448.8bn

    Spread between methods: 4%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.51%135.24138.24141.85146.22151.59
    9.51%118.31120.04122.10124.57127.55
    10.51%105.13106.09107.25108.63110.29
    11.51%94.5795.0695.6696.3997.27
    12.51%85.9386.1186.3686.6887.10

    Outlined: this model. Green text: above today's price of 62.34. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year12.6%7.2%0.4%
    EBIT margin29.5%23.7%-4.2%
    Discount rate-10.5%16.5%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.