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Netflix Inc
NASDAQ:NFLX

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Netflix Inc
NASDAQ:NFLX
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Price: 465.74 USD -1.74% Market Closed
Updated: Dec 3, 2023
Section:
 

DCF Value

This DCF valuation model was created by Alpha Spread and was last updated on Dec 2, 2023.

Estimated DCF Value of one NFLX stock is 263.64 USD. Compared to the current market price of 465.74 USD, the stock is Overvalued by 43%.

NFLX DCF Value
Base Case
263.64 USD
Overvaluation 43%
DCF Value
Price
Worst Case
Base Case
Best Case
263.64
DCF Value
Worst Case
Base Case
Best Case
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DCF Value: 263.64 USD
Netflix Inc Competitors:
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Valuation Analysis

DCF Financials
Financials used in DCF Calculation

Revenue
37.6B 53.4B
Net Income
5.8B 10B

Sensitivity Analysis
DCF Value Sensitivity Analysis

Revenue Growth Net Margin Discount Rate

Present Value Calculation

The first step in the DCF calculation process is to estimate the company's future free cash flow. Once free cash flow is forecasted, it is discounted at a risk-appropriate discount rate. The resulting value is the present value of the company's free cash flow. You can change any model inputs below.

Available Valuation Models
2 valuation models available
Alpha Spread
Updated on Dec 2, 2023
Default Valuation
nazanin fakhray
Updated on Aug 10, 2023
Set As Default
Create My Valuation Model
Model Settings
Operating Model
Worst Case Base Case Best Case
Discount Rate
8.14%
Forecast Period
5 Years
Terminal Growth
0%
Discount Rate
8.14%
Terminal Growth
0%
Growth Period
5 Years
Copy as My Model

DCF Model
Base Case Scenario

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DCF Model
Currency: USD
Millions
Thousands Millions Billions Trillions

To view the process of deriving the DCF Value of one share from the estimated Present Value, see the DCF Value Calculation block.

DCF Value Calculation

Depending on which type of operating model is chosen (equity or whole firm valuation model), the resulting value is either the value of equity or the value of the entire firm. In the case of the latter, to move from the value of the firm to the value of equity, liabilities are subtracted and assets are added.

Capital Structure
From Present Value to DCF Value

Present Value 115B USD
Equity Value 115B USD
/ Shares Outstanding 438m
NFLX DCF Value 263.64 USD
Overvalued by 43%

To view the process of calculating the Present Value of Netflix Inc' future free cash flow, see the Present Value Calculation block.

See Also

Summary
NFLX intrinsic value, competitors valuation, and company profile.
DCF Valuation
NFLX stock valuation using Discount Cash Flow valuation method.
Relative Valuation
NFLX stock valuation using valuation multiples.
Wall Street Estimates
NFLX price targets and financial estimates made by Wall st analysts.
Profitability Analysis
Detailed analysis of the company's profitability.
Solvency Analysis
Analysis of the financial position and solvency of the company.
Financials
Income Statement, Balance Sheet, Cash Flow Statement.
Discount Rate
NFLX stock discount rate: cost of equity and WACC.
Summary
DCF Valuation
Relative Valuation
Wall Street Estimates
Profitability Analysis
Solvency Analysis
Financials
Discount Rate
Discover More

What is the DCF value of one NFLX stock?

Estimated DCF Value of one NFLX stock is 263.64 USD. Compared to the current market price of 465.74 USD, the stock is Overvalued by 43%.

The true DCF Value lies somewhere between the worst-case and best-case scenario values. This is because the future is not predetermined, and the stock's DCF Value is based almost entirely on the future of the company. Knowing the full range of possible stock DCF values gives a complete picture of the investment risks and opportunities.

How was the DCF Value calculated?

1. Present Value Calculation. Using the DCF Operating Model we project Netflix Inc's future free cash flow and discount it at a selected discount rate to calculate its Present Value (115B USD).

2. DCF Value Calculation. We use the company's capital structure to calculate the total Equity Value based on the previously computed Present Value of the free cash flow. Dividing the Equity Value by the number of shares outstanding gives us the DCF Value of 263.64 USD per one NFLX share.

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How is DCF value calculated?

Alpha Spread forecasts a company's future cash flow and estimates the appropriate discount rate to calculate the DCF value of a stock.

1. Free cash flow forecasting

You can view the operating model used to estimate free cash flow in the "DCF Operating Model" block. You can change model inputs forecasted by our algorithm (such as revenue growth, margins, etc.) if you are a professional analyst and have your own opinion about them.
Click here to read more about FCF forecasting.

2. Calculating present value

Once free cash flow is forecasted, it is discounted at a risk-appropriate discount rate (which you can also change in the DCF settings). The resulting value is the present value of the company's free cash flow.

DCF Operating Model
Capital Structure
3. Calculating the value of equity

Depending on which type of operating model for the company our algorithm has chosen (equity or whole firm valuation model), the resulting value is either the value of equity or the value of the entire firm. In the case of the latter, to move from the value of the firm to the value of equity, liabilities are subtracted and assets are added. You can see these and subsequent steps in the block "Capital structure".

4. Calculating the DCF value of one stock

In order to come from the value of equity to the DCF value of one share, we only need divide the equity value by the number of shares outstanding.

See Also:
What is DCF valuation? What are valuation scenarios?
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