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Signal Ledger valuation · NFLX

Netflix Inc

What the shares are worth today on our research (cited consensus, company plans and peers, since management sets no usable targets): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Sep 30, 2026.

Signal Ledger valuation$82.57+23% vs $67.05
Business value at FY2030
$422B
FY2030 revenue
$84B
FY2030 EPS · P/E
$5.83 · 21×
Discount rate (WACC · equity)
9.56% · 9.87%

How this is built. Netflix publishes annual guidance but no usable public long-range revenue target; updated FY2026 management guidance anchors revenue and GAAP margin, and the methodology defaults extrapolate to FY2030. Each input below shows its basis: consensus, company plan, peer or rule.

Researched Oct 23, 2026 from SEC filing 0001065280-26-000291 · price $67.05 at research time · Valuation methodology

Latest quarter in this research: Q3 2026

Reported Oct 20, 2026 for the quarter to Sep 30, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).

Revenue$12.9B
Operating income$4.46B34.6% margin
Net income$3.66B
Diluted EPS$0.87
SegmentRevenuevs a year agoOperating incomeMargin
Streaming$12.9B+12%$4.46B34.6%
  • Revenue rose 11.8% year over year to $12.874B; GAAP operating margin was 34.6%, versus 28.2% a year earlier.
  • FY2026 revenue guidance is $51.1B and GAAP operating margin remains 31.5%; advertising revenue is now expected at approximately $2.7B, versus approximately $3B previously.
  • Quarterly operating cash flow was $3.162B and free cash flow was $2.884B; FY2026 free cash flow guidance fell to approximately $12B from $12.5B, primarily for an expected Q4 real estate transaction.
  • Netflix repurchased 63.9 million shares for $4.8B during Q3 and had $22.3B remaining under its repurchase authorizations.

What each business is worth

BusinessModelFY2030 revenueValue todayPer share2030 multipleValue from beyond FY2030
StreamingMargin$84B$346B$84.2515.1× EBIT65%
All businesses$84B$346B$84.25

From 2030 back to today

  1. Enterprise value at end of FY2030$422B
  2. Plus net cash at FY2030$70B
  3. Equity value at FY2030$492B
  4. ÷ (1 + 9.87%)^4.3 years at the cost of equity$329B
  5. + dividends paid on the way, discounted$0B

This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 2.8%, inside our 5% tolerance.

From businesses to one share

  1. All businesses, valued today$346B
  2. − borrowings$15B
  3. − finance leases$0B
  4. + cash and short-term investments$8.2B
  5. ÷ diluted shares4.106B
  6. Signal Ledger valuation$82.57

Year by year to FY2030

Fiscal yearRevenueEBITDACapexFree cash flowNet debt at year end
FY2026$51B$16B$0.8B$12B$3.9B
FY2027$58B$19B$0.9B$14B$10B cash
FY2028$65B$22B$1B$16B$27B cash
FY2029$74B$25B$1.1B$19B$47B cash
FY2030$84B$29B$1.3B$21B$70B cash

What must be true

  • Streaming grows revenue from $51.1B in FY2026 to $83.6B in FY2030 (1.6×).
  • Streaming raises its EBIT margin from 31.5% to 33.5%.
  • The company spends $5.1B of capital expenditure through FY2030.
  • Net debt peaks at $6.9B in FY2025 and stays financeable.

What the price implies

At our discount rate, the price assumes less than our research overall: one combination matching $67.05 is about $67.1B of FY2030 sales (growth of about 7.0% a year from FY2026) with 33.5% GAAP EBIT margin — versus $83.6B and 33.5% GAAP EBIT margin in our research.

At the research price of $67.05 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.

If sales and margins changed together

Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.

FY2030 sales factorFY2030 salesFY2026–30 CAGRRequired FY2030 marginRequirement
0.80×At research margins$67.1B7.0%
33.5% GAAP EBIT
Within margin guardrails
1.50×$125.4B25.2%
19.1% GAAP EBIT
Within margin guardrails
2.00×$167.2B34.5%
14.7% GAAP EBIT
Within margin guardrails
3.00×$250.8B48.8%
10.3% GAAP EBIT
Within margin guardrails

CAGR uses $51.1B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.

Implied discount rate
11.0%

The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.6% WACC · 9.9% cost of equity.

All-business FY2030 sales factor
0.80×

FY2030 revenue would need to reach $67.1B (model: $83.6B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.

If only one business changed

Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.

Streaming

Revenue alone
FY2030 revenue would need to reach $68.1B (model: $83.6B).
Margin alone

FY2030 EBIT margin would need to reach 27.5% (model: 33.5%).

Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.

The discount rate

Cost of equity
9.87%

r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp)

WACC
9.56%

methodology §4.5: market-weighted WACC, not rounded

10-year Treasury · model / spot
3.87% · 5.13%

The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.

Every input, with its source

Show 13 inputs · reported, guidance and rule-based
InputValueBasisWhy
Revenue FY2026Streaming$51.1BGuidancehold moderate (methodology §4.2), growth 13.1% sec.gov ↗
Revenue FY2030Streaming$83.6BGuidancehold moderate (methodology §4.2), growth 13.1% sec.gov ↗
EBIT margin FY2030Streaming33.5%Rulelinear path to 33.5% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 13.1% to FY2030; no cited expansion evidence) sec.gov ↗
Maintenance capexStreaming1.5%ReportedFY2025 PPE purchases $0.688B / revenue; capex exceeds PPE depreciation. sec.gov ↗
Terminal growthStreaming3.0%Rulemethodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗
WACCDiscount rates9.56%Rulemethodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21
Cost of equityDiscount rates9.87%Ruler_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes)
Tax rateDiscount rates21.0%RuleNo forward effective tax guidance or verified three-year cash-tax series was found; use the statutory 21% fallback rather than infer a normal tax rate from the one-off WBD fee. uscode.house.gov ↗
Cash and short-term investmentsBalance sheet$8.2BReportedcash, cash equivalents and short-term investments; use consolidated short-term investment total once, including all security classes sec.gov ↗
BorrowingsBalance sheet$15.1BReportedborrowings due within a year plus long-term borrowings us-gaap:ShortTermBorrowings · 0001065280-26-000291 + us-gaap:LongTermDebtNoncurrent · 0001065280-26-000291
Finance leasesBalance sheet$0.0BReportedno finance lease liability reported balance sheet 2026-09-30
SharesBalance sheet4.106BReportedshares outstanding as of 2026-09-30 cover page of 10-Q 0001065280-26-000291
Dividends per yearShareholders$0.0BReportedCapital returns are share repurchases; no cash dividend declared. × 4.106B shares sec.gov ↗

Research notes

  • share-count comparison: 4.195127B quarter 2026-07-01..2026-09-30 · 0001065280-26-000291; point-in-time denominator retained
  • cost of equity 9.87% (β 1.20 after Blume adjustment), WACC 9.6%

Signal Ledger research built from cited consensus, company plans and peer economics because management sets no usable targets — not a forecast and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →