Update shared on 05 Dec 2025
Fair value Decreased 0.16%Analysts make a marginal downward adjustment to their Netflix price target, trimming fair value by approximately $0.21 per share as slightly lower long term margin assumptions offset modestly higher revenue growth and a richer future P E multiple.
Analyst Commentary
Street research remains broadly constructive on Netflix, with most recent notes emphasizing resilient engagement, growing advertising ambitions, and durable pricing power, even as some caution emerges around execution risk and potential strategic moves.
Bullish Takeaways
- Bullish analysts highlight that Netflix continues to show strong engagement and remains a leading choice for living room viewing, supporting the case for sustained revenue and earnings growth.
- Several models incorporate ad supported tiers becoming a primary growth and monetization driver from 2026, with upside to contribution margin and free cash flow as ad technology, live events, and targeting capabilities scale.
- Upgrades and higher price targets are being justified by improved long term margin assumptions and evidence that recent price increases have been absorbed with limited churn, reinforcing Netflix's pricing power and competitive moat.
- Despite one time headwinds such as the Brazilian tax accrual, underlying operating income trends and guidance are viewed as intact, with modest upward revisions to outer year forecasts in some cases.
Bearish Takeaways
- Bearish analysts point to underwhelming elements of recent quarterly results and guidance, noting that expectations had become elevated after several quarters of exceptional performance, which raises the bar for future execution.
- There is concern that any large scale strategic acquisition, such as a potential bid for major studio assets, could introduce regulatory risk, limited synergy realization, and near term dilution to free cash flow per share.
- Some valuations are being trimmed slightly on the view that long term margin expansion may be more gradual than previously assumed, especially as content investments and global advertising build out remain capital intensive.
- While advertising is seen as a key growth pillar, the pace and magnitude of monetization remain uncertain, leaving room for disappointment if ad revenue or engagement trends fall short of bullish projections.
What's in the News
- Netflix has emerged as a serious contender in the escalating auction for Warner Bros. Discovery, actively courting regulators and narrowing the gap with early front-runner Paramount Skydance as bids move to the next stage (New York Post).
- Warner Bros. Discovery has asked Netflix and other interested bidders, including Comcast and Paramount Skydance, to submit improved offers by December 1 following an initial round of non binding bids for all or part of the company (Bloomberg).
- Netflix, Comcast, and Paramount have formally submitted bids for some or all of Warner Bros. Discovery assets, with a further round of final binding offers expected after deal terms are refined (Deadline).
- Deal insiders expect the winning bid for Warner Bros. Discovery to come in well below the $30 per share level CEO David Zaslav has publicly targeted, even as Netflix remains one of the leading contenders in the bidding war (New York Post).
- Major League Baseball is finalizing new media agreements that will see Netflix pay about $50 million annually to stream marquee events including Opening Day in prime time, the Home Run Derby, and the "Field of Dreams" game, expanding Netflix's live sports footprint (The Athletic).
Valuation Changes
- Fair Value: reduced slightly from $134.65 to $134.44 per share, reflecting a marginally lower intrinsic value estimate.
- Discount Rate: decreased modestly from 9.10 percent to approximately 9.07 percent, indicating a slightly lower assumed cost of capital.
- Revenue Growth: edged up fractionally from 11.76 percent to about 11.76 percent, signaling effectively unchanged long term top line expectations.
- Net Profit Margin: trimmed from roughly 30.89 percent to 30.46 percent, representing a small downward revision to long term profitability assumptions.
- Future P E: increased from 38.49x to 38.96x, implying a slightly richer valuation multiple on forward earnings.
Disclaimer
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