• If you are wondering whether Netflix at around US$91 per share still offers value, or if most of the easy gains are already behind it, this article will help you put the current price into context.
• The stock is close to flat year to date with a 0.4% return, following an 18.8% decline over the last year and shorter term moves of 1.3% over 7 days and 2.2% over the past month.
• Recent headlines have centered on Netflix refining its content slate and subscriber offering, including ongoing moves in pricing, content spending and partnerships. These developments often influence how investors view its long term growth potential. Alongside this, broader conversations about streaming profitability and competition help frame how the market currently thinks about what Netflix is worth.
• Right now, Netflix scores a 4 out of 6 valuation checks, and the next sections will break that down using several common valuation approaches while also pointing to a more holistic way to think about value at the end of the article.

Approach 1: Netflix Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of a company’s future cash flows, then discounts them back to today to arrive at an estimate of what the business could be worth per share.

For Netflix, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The last twelve months free cash flow is around $12.0b. Analyst and extrapolated projections suggest free cash flow of about $22.7b by 2030, with a path of annual figures between 2026 and 2035 that are first based on analyst estimates and then extended using Simply Wall St assumptions.

After discounting those projected cash flows back to today, the DCF model points to an estimated intrinsic value of about $89.74 per share. Compared with a current share price around $91, the model implies the stock is roughly 1.8% overvalued, which is a very small gap and well within the kind of uncertainty that comes with any long term forecast.

Result: ABOUT RIGHT

Netflix is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Netflix Price vs Earnings

For profitable companies like Netflix, the P/E ratio is a widely used way to gauge how much you are paying for each dollar of earnings. It links the share price directly to current earnings, which many investors watch closely when comparing opportunities.

What counts as a “normal” P/E depends on how quickly earnings are expected to grow and how risky those earnings appear. Higher growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk often points to a lower one.

Netflix currently trades on a P/E of about 28.77x. That sits below both the Entertainment industry average of around 36.44x and the peer group average of roughly 54.49x. Simply Wall St’s “Fair Ratio” for Netflix is 31.40x, which is its proprietary estimate of a suitable P/E based on factors such as earnings growth, industry, profit margins, market cap and company specific risks.

This Fair Ratio can be more informative than a simple comparison with peers or the industry because it adjusts for Netflix’s own profile rather than assuming it should trade in line with a broad group.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Netflix Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so this is where Narratives come in. They let you attach a clear story about Netflix to the numbers by linking your view on its future revenue, earnings and margins to a fair value estimate that can be compared with today’s price.

On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors. You can set your own assumptions, see the implied fair value, and then quickly spot when your view suggests Netflix is above or below the current market price, rather than relying only on ratios like the P/E.

Because Narratives update automatically when new data arrives, such as quarterly earnings, news about content deals or analyst revisions, your story and its valuation stay current without you having to rebuild a model from scratch.

The range of existing Netflix Narratives on the platform illustrates how views can differ. Some investors arrive at fair values around US$79.39 or US$85.52, while others land closer to US$142.64, US$113.17 or even US$135.02. This gives you a live spectrum of perspectives to compare with your own before deciding how attractive the current price looks to you.

For Netflix however we will make it really easy for you with previews of two leading Netflix Narratives:

Together they frame a reasonable range of outcomes for both the business and the share price, and give you concrete assumptions to compare with your own view.

Fair value: US$797.74 per share

Price gap: around 88.6% below this fair value based on the recent US$91.37 share price

Revenue growth assumption: 13%

• Sees Netflix benefiting from possible consolidation in streaming, with its scale giving it stronger leverage when licensing third party content.
• Emphasises internal levers such as ad supported tiers, paid sharing and disciplined content spending as key drivers for future margins and cash flows.
• Assumes subscriber growth and average revenue per member continue to build over time, supporting a much higher long term earnings base than today.

Fair value: US$85.52 per share

Price gap: around 6.8% above this fair value based on the recent US$91.37 share price

Revenue growth assumption: 10.60%

• Focuses on rising content costs, intense competition for attention and regulatory pressures that could weigh on margins over time.
• Highlights risks around slower subscriber growth, greater price sensitivity and subscription fatigue that could limit Netflix’s pricing power.
• Builds in analyst assumptions for revenue, earnings and a lower future P/E, which together point to a more cautious fair value than the bullish view.

Both Narratives are built from explicit assumptions on revenue growth, margins, valuation multiples and discount rates, rather than vague stories. That makes it easier for you to decide which set of expectations feels closer to your own, or whether your personal fair value for Netflix sits somewhere between these two bookends.

If you want to see the full inputs and tweak them yourself, you can review the complete Narrative set on Simply Wall St and compare where your outlook puts Netflix relative to today’s price, as well as to other companies you follow.

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Netflix on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Do you think there's more to the story for Netflix? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.