MeritValue

NETFLIX INC

NFLXdata completeness 100%19 fiscal years on file
The thesis, from the filings

NETFLIX INC earns about 24% on invested capital, far above its ~9% cost of capital, but has diluted owners by 854% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $12.9 and $93.84 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$29.7B1$31.6B2$33.7B3$39B3$45.2B3
Net income$5.12B4$4.49B5$5.41B6$8.71B6$11B6
Operating cash flow$392.6M7$2.03B8$7.27B9$7.36B9$10.1B9
Capital expenditure$524.6M10$407.7M11$348.6M12$439.5M12$688.2M12
Free cash flow (derived)−$132M7$1.62B8$6.93B9$6.92B9$9.46B9
Total debt$15.4B13$14.4B14$14.5B15$15.6B16$14.5B16
Cash & equivalents$6.03B17$5.15B18$7.12B19$7.8B20$9.03B20
Diluted shares455.4M451.3M4.49B4.39B4.34B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$61.27
your share of equity
Profit it earned you last year
$25.28
Free cash flow it threw off
$21.78
Debt you’d be carrying
$33.29

10 shares is a claim on $61.27 of net worth that earned you $25.28 and generated $21.78 of cash last year, against $33.29 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
24% avg · 5y
FY21 23%FY22 17%FY23 21%FY24 27%FY25 34%

It earned about 24% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
+854% shares · 5y

Share count is up 854% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $12.9 and $93.84 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$93.84
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$6.93B
DCF · Growth Exit 5Y
$50.73
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$6.93B
Earnings Power Value
$12.9
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$5.41B
  • growthAssumed0.0%
Graham Number
$18.68
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $50.73
The three cases
Bear0.0%$21.53
Base20.0%$50.73
Bull20.0%$50.73

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001065280-24-000030 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001065280-25-000044 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001065280-26-000034 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001065280-24-000030 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001065280-25-000044 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001065280-26-000034 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001065280-24-000030 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001065280-25-000044 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001065280-26-000034 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001065280-24-000030 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001065280-25-000044 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001065280-26-000034 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001065280-23-000035 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001065280-24-000030 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001065280-25-000044 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001065280-26-000034 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001065280-23-000035 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001065280-24-000030 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001065280-25-000044 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001065280-26-000034 (CashAndCashEquivalentsAtCarryingValue)