What’s The Long-Term Prediction For Netflix?


  • Netflix membership and revenues continue to grow, albeit at slower rates, but free cash flow generation is improving.
  • Growth through re-investment and acquisitions remain the priority for management, though there is some hope for investors seeing buybacks this year.
  • Our overall view of Netflix is positive but with uncertainties. We don’t see compelling reasons to buy or sell and maintain our “hold” rating.
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Mario Tama

Our view

In our last of Netflix (NASDAQ:NFLX) back in September 2022, we rated the stock as a “hold.” Since then, the company’s stock price has increased by more than 50% and it has released its full-year results for FY22.

Valuation assumptions Lower Mid Upper
Earnings growth 7.5% 10% 15%
Re-investment rate 80% 70% 50%
Price-to-earnings ratio (10Y) 15.0 17.5 20.0
Total return (10Y) -5% 42% 159%
Implied compound annual return -0.5% 3.6% 10.0%

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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