What Is Netflix Worth? A Ten-Year Model and My Buy Discipline

TL;DR With one-time items stripped out, my Netflix model uses 6–10% revenue growth, 20–26% margins, and a 20–26x exit multiple over ten years. That lands intrinsic value near $74 — right about where it trades. For a 15% return I’d only buy around $50, so it goes on the watchlist at $55, not the buy list.

Start with what you’re actually paying

Before any assumption, anchor on price. Netflix’s market cap — share price times shares outstanding — is about $318 billion. Its enterprise value, which is what you’d pay to buy every share and settle all the debt, is roughly $335 billion. That $17 billion gap is essentially the net debt. Enterprise value is the honest “buy the whole thing” price.

Now the cash. Netflix generated about $11.9 billion in free cash flow, but that included the ~$2 billion Warner Bros. breakup fee. Take it out — because you can’t rely on one-time money — and you’re at roughly $9.9 billion of recurring free cash flow. I make that distinction on purpose. If you value a business on money that shows up once, you’ll overpay.

The quality is real — the question is the price

The fundamentals here are genuinely strong, and that’s not in dispute:

• Returns on capital: ~16.3% per year over five years, 19.7% over the last one. That’s a business that turns capital into profit efficiently.
• Margins: ~17% over ten years, 20% over five, and 28% over the last year — though that 28% carries the $2 billion one-timer, so normalized it’s closer to 23–24%. Still expanding.
• Eight pillars: six green checks, and the only two failures are valuation. That combination is exactly what I like to see. It says the company is fundamentally sound; the only open question is whether I can pay the right price.

For context, our community pegs intrinsic value around $72 and rates it a hold. Netflix buys back stock, earns high returns on capital, and grows cash flow, revenue, and net income with a reasonable debt load. Fundamentally, it’s a good company. Being patient on price is the whole job from here.

Building the ten-year model

Here’s the walk-through, and the honest part is that these are my assumptions — yours can differ. I ran a ten-year analysis with three scenarios on each lever:

Assumption	Low	Base	High
Revenue growth	6%	8%	10%
Profit / FCF margin	20%	23%	26%
Exit P/E and P/FCF	20x	23x	26x

A few notes on why. Analyst estimates have revenue going from about $52 billion to $96 billion over roughly seven years and earnings per share nearly doubling — that’s a bit under 10% on both, which is why I center growth at 8%. On margins, I deliberately normalized out the $2 billion, and I’ll admit I might be too conservative since margins are still climbing. On the exit multiple, the long-run market average is 15–16x, but you pay up for quality and down for junk. This is a quality business that, in my view, dominates streaming — so 20–26x is defensible even if you’d rather use 18–21x. Finally, I discount at 9% with no margin of safety, purely to find intrinsic value.

What the number says

With those inputs, the model returns an intrinsic value of about $74 per share, with a low case near $50 and a high case near $107 — against a current price of roughly $74. In other words, at today’s price you’re paying close to fair value for the base case, with the upside living mostly in the margin story going better than I modeled.

That’s useful, but fair value isn’t a buy signal for me. This is where discipline separates investing from hoping.

My buy discipline

I want a 15% return — and that’s specific to me. I have businesses, real estate, and other things working for me, so I can afford to be picky; my hurdle used to be 12% and I raised it to 15% over time precisely so I only buy what makes overwhelming sense. Because intrinsic value uses a 9% discount and no margin of safety, I then demand a higher return on top, which means a lower entry price.

For Netflix, that math means I only buy around $50 a share. So it goes on my watchlist at $55 — not to buy blindly there, but to re-evaluate: maybe I sell puts and get paid while I wait to own it lower, or maybe the fundamentals have improved enough that $55 becomes the right price by then.

Here’s the takeaway I want you to keep. What I just walked through takes about three minutes, and it tells you more than most people ever learn before they buy. Most investors glance at the price, skim a headline, and decide — which is exactly how you end up sick to your stomach when the stock drops, because you never knew what it was worth. Put in smart assumptions, let the process hand you a price, and you’ll know what you own, what you paid, and exactly why. If you want the setup behind all this, revisit why the stock fell and the full bull-and-bear breakdown.