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1. Company Snapshot

1.a. Company Description

Netflix, Inc.provides entertainment services.It offers TV series, documentaries, feature films, and mobile games across various genres and languages.


The company provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices.It also provides DVDs-by-mail membership services in the United States.The company has approximately 222 million paid members in 190 countries.


Netflix, Inc.was incorporated in 1997 and is headquartered in Los Gatos, California.

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1.b. Last Insights on NFLX

Netflix faces margin pressures and rising competition from Disney+ and Amazon Prime. A Brazilian tax dispute impacted its recent earnings, causing short-term concerns. The company's advertising growth is a key catalyst for future success, but its premium valuation and competition suggest caution. Investigations into potential securities law violations by The Schall Law Firm and Robbins Geller Rudman & Dowd LLP may also weigh on investor sentiment. Additionally, investor concerns about media dealmaking, competition, and the company's next growth phase are mounting.

1.c. Company Highlights

2. Netflix's Q3 2025 Earnings: A Strong Performance with Healthy Growth Prospects

Netflix's Q3 2025 revenue was in line with expectations, while operating income exceeded forecasts, excluding a one-time Brazilian tax expense of 10% on certain payments made by Brazilian entities to companies outside of Brazil. The company's actual EPS came out at $5.87, below estimates of $6.96. Despite this, the business remains healthy, driven by strong engagement, with the company achieving a record share of TV time in the US and UK. Ad sales saw significant growth, with Netflix on track to more than double ad revenue this year.

Publication Date: Oct -22

📋 Highlights
  • Revenue Alignment & Tax Impact:: Q3 revenue met expectations; operating income fell short by 10% due to a non-income Brazilian tax (CIDE), with 20% of the expense tied to 2025.
  • Ad Revenue Growth:: Ad sales are doubling in 2025, driven by a $120M+ ad tech stack rollout and 2025-2026 upfront commitments, targeting 10x current ad revenue by 2026.
  • Market Expansion Potential:: Netflix holds only 7% of consumer spending and 10% of TV time in major markets, leaving room to grow share in both metrics.
  • Live Event Success:: The Canelo vs. Crawford boxing match drew 41M live-plus-one viewers, showcasing live content’s role in engagement and acquisition.

Ad Revenue Growth and Live Offerings

The company's ad revenue growth is driven by its growing scale, highly attentive audience, and the rollout of its ad tech stack. Netflix has more than doubled upfront commitments for ads, partly in 2025 and partly in 2026. The company will continue to build out its advertising business, making it easier for advertisers to buy on its service and improving ad formats. Live offerings, including sports, are being developed, with recent successes such as the Canelo vs. Crawford fight drawing 41 million live-plus-one viewers.

Content Strategy and Innovation

Netflix's content strategy remains focused on providing exclusive first-run movies to its members, with occasional theatrical releases for select films. The company is investing in interactive content, including games, which it sees as a way to deepen engagement and create new entertainment experiences. Netflix has also partnered with popular creators from other platforms, like YouTube, to expand its content offerings.

Valuation and Growth Prospects

Analysts estimate Netflix's revenue growth at 13.0% for next year. With a current P/E Ratio of 39.98 and EV/EBITDA of 33.33, the market appears to be pricing in significant growth prospects. Netflix's ROIC of 30.57% and ROE of 53.03% indicate a strong ability to generate returns on invested capital and equity. As the company continues to innovate and expand its offerings, its growth prospects appear promising.

AI and Future Opportunities

According to Gregory Peters, Netflix sees GenAI providing more capable tools, improving productivity, and delivering better results for members, creators, and partners. The company is investing in AI technologies to enhance its products and services, and is confident that AI will help its creative partners tell stories better, faster, and in new ways.

3. NewsRoom

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CNN Got Snubbed In The Netflix-WBD Deal—Why That's Ultimately A Good Thing

Dec -06

Source: forbes.com

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How would the Netflix-Warner Bros. deal reshape Hollywood?

Dec -06

Source: techcrunch.com

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Netflix Doubled Your Money in 12 Months After Years of Lagging the Market

Dec -06

Source: 247wallst.com

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META, NFLX, CRM, And More: 5 Stocks That Dominated Investor Buzz This Week

Dec -06

Source: feeds.benzinga.com

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Why Netflix Shareholders Aren't Thrilled to Acquire Warner Bros.

Dec -06

Source: wsj.com

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Wall Street predicts Netflix stock price for the next 12 months

Dec -06

Source: finbold.com

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Netflix has a history of successful self-disruption. Its Warner Bros.

Dec -06

Source: businessinsider.com

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Netflix Makes a Blockbuster Deal for Warner Bros. But Is It a Win for Investors?

Dec -06

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.30%)

6. Segments

Streaming Entertainment Service

Expected Growth: 12.3%

The growth is driven by increasing demand for streaming services, expansion into new markets, and continuous investment in original content, which attracts and retains subscribers. Competition and market saturation might slightly limit growth, but Netflix's strong brand and content library support steady expansion.

7. Detailed Products

Streaming Service

A subscription-based online streaming service that provides access to a vast library of movies, TV shows, documentaries, and original content produced exclusively for Netflix.

Original Content

Exclusive TV shows and movies produced by Netflix, including dramas, comedies, documentaries, and children's programming.

DVD Rental Service

A DVD rental service that allows customers to rent DVDs by mail, with a flat monthly fee and no late fees.

8. Netflix, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Netflix has a moderate threat of substitutes due to the presence of alternative entertainment options such as video game consoles, social media, and outdoor activities. However, the convenience and affordability of Netflix's service mitigate this threat to some extent.

Bargaining Power Of Customers

Netflix has a low bargaining power of customers due to its dominant market position and lack of switching costs. Customers are also loyal to the brand, which reduces their bargaining power.

Bargaining Power Of Suppliers

Netflix has a low bargaining power of suppliers due to its significant market share and ability to negotiate favorable content deals. The company's dependence on a few major studios and networks is mitigated by its diversified content offerings.

Threat Of New Entrants

Netflix faces a high threat of new entrants due to the low barriers to entry in the streaming industry. New players such as Disney+, HBO Max, and Peacock have already entered the market, increasing competition and threatening Netflix's market share.

Intensity Of Rivalry

The intensity of rivalry in the streaming industry is high due to the presence of multiple players competing for market share. Netflix faces intense competition from established players such as Amazon Prime Video and Hulu, as well as new entrants, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 41.40%
Debt Cost 5.91%
Equity Weight 58.60%
Equity Cost 10.09%
WACC 8.36%
Leverage 70.64%

11. Quality Control: Netflix, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nexstar Media

A-Score: 7.3/10

Value: 7.0

Growth: 8.2

Quality: 7.6

Yield: 7.0

Momentum: 7.0

Volatility: 6.7

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AT&T

A-Score: 7.0/10

Value: 7.1

Growth: 2.6

Quality: 5.7

Yield: 9.0

Momentum: 8.5

Volatility: 9.3

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Verizon

A-Score: 6.9/10

Value: 7.0

Growth: 3.1

Quality: 5.5

Yield: 10.0

Momentum: 5.5

Volatility: 10.0

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Comcast

A-Score: 6.5/10

Value: 8.4

Growth: 5.2

Quality: 8.0

Yield: 7.0

Momentum: 1.5

Volatility: 8.7

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Netflix

A-Score: 5.6/10

Value: 0.8

Growth: 9.0

Quality: 8.1

Yield: 0.0

Momentum: 9.0

Volatility: 6.7

1-Year Total Return ->

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Walt Disney

A-Score: 5.4/10

Value: 4.5

Growth: 5.3

Quality: 5.9

Yield: 1.0

Momentum: 7.0

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

100.24$

Current Price

100.24$

Potential

-0.00%

Expected Cash-Flows