NFLX
Netflix, Inc.
Communication Services · Entertainment · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The growth factor reflects double-digit revenue expansion and even faster earnings growth, with net income up 26.1% and EPS up 27.8% in FY2025, contributing strongly to the composite [growth.net_income.yoy, growth.eps_diluted.yoy].
- Exceptional profitability metrics—29.5% operating margin, 24.3% net margin, and 19.8% return on assets—further supported the composite score by demonstrating efficient and high-quality earnings generation [profitability.operating_margin_pct, profitability.net_margin_pct, profitability.roa_pct].
- Consistent sequential quarterly revenue growth and a sharp 2026Q1 earnings recovery added momentum support, rounding out the factors that drove the 62.5/100 composite and Low risk rating [momentum.revenue_quarterly, momentum.net_income_quarterly].
Why Not Higher
- The absence of any dividend payment scores zero on that factor, and no macro-theme assignment scores zero on the theme factor, both of which weighed on the composite and prevented a higher overall score [dividend.none, theme.none].
- Mid-cycle quarterly earnings volatility—with net income falling from $3,125,413,000 in 2025Q2 to $2,418,521,000 in 2025Q4—introduced variability that tempered the momentum assessment despite the strong 2026Q1 recovery [momentum.net_income_quarterly].
Data Confidence
8 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024 to FY2025 by 15.9%, reaching $45,183,036,000, while net income rose 26.1% and diluted EPS increased 27.8% over the same period.
The model rewarded the combination of double-digit top-line expansion and even faster bottom-line growth, reflecting operating leverage that amplified revenue gains into proportionally larger earnings and per-share improvements.
In FY2025, Netflix posted an operating margin of 29.5%, a net margin of 24.3%, and a return on assets of 19.8%, indicating that a substantial share of each revenue dollar flows through to both operating and net income while assets are deployed efficiently.
The model rewarded these high and simultaneous margin and return metrics, as they collectively signal that the business converts revenue into profit at an exceptional rate and generates strong earnings relative to its asset base.
Filing evidence currently available does not support a more specific explanation for this factor.
Quarterly revenue showed consistent sequential growth across the last four reported quarters, rising from $11,079,166,000 in 2025Q2 to $11,510,307,000 in 2025Q3, $12,050,762,000 in 2025Q4, and $12,249,757,000 in 2026Q1. Net income was more variable, dipping from $3,125,413,000 in 2025Q2 to $2,418,521,000 in 2025Q4 before surging to $5,282,791,000 in 2026Q1, while operating income similarly troughed in 2025Q4 at $2,956,663,000 before recovering to $3,956,997,000 in 2026Q1.
The model appears to have rewarded the unbroken upward trend in quarterly revenue alongside the sharp recovery in both net and operating income in 2026Q1, signaling renewed earnings momentum even after mid-cycle softness.
Netflix does not currently pay a dividend and has no mapped dividend history, making it a genuine non-payer rather than a case of missing data.
The model assigns a score of zero for this factor because dividend income is absent entirely; investors in this security receive no current yield, and the full weight of return potential rests on capital appreciation.
Netflix is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means the security did not receive incremental score from macro-theme tailwinds under the model's current methodology; this is a neutral classification rather than a negative signal about the company's business.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Netflix delivered strong FY2025 results, with revenue reaching $45,183,036,000—a 15.9% year-over-year increase—while net income grew 26.1% and diluted EPS rose 27.8%, demonstrating meaningful operating leverage [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy]. Profitability metrics were exceptional, with a 29.5% operating margin, 24.3% net margin, and 19.8% return on assets in FY2025, signaling highly efficient conversion of revenue into earnings [profitability.operating_margin_pct, profitability.net_margin_pct, profitability.roa_pct]. Quarterly revenue has risen without interruption across the last four reported periods, and a sharp recovery in net and operating income in 2026Q1 reinforces the earnings momentum narrative [momentum.revenue_quarterly, momentum.net_income_quarterly]. The composite score of 62.5/100 and a Low risk rating support a Core Holding Candidate classification, though the absence of a dividend and no macro-theme assignment both scored zero, weighing on the overall composite [dividend.none, theme.none].
Plain English
Netflix is growing fast and keeping a lot of what it earns—revenue is up nearly 16% and profits are growing even faster—making it a solid, low-risk core holding, though it pays no dividend and isn't tied to any special market trend the model tracks right now [growth.revenue.yoy, growth.net_income.yoy, dividend.none, theme.none].
Bull Case vs. Bear Case
Bull Case
- Revenue grew 15.9% year-over-year to $45,183,036,000 in FY2025, and bottom-line growth outpaced top-line growth with net income up 26.1% and diluted EPS up 27.8%, reflecting strong operating leverage [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy].
- Netflix's FY2025 operating margin of 29.5% and net margin of 24.3%, combined with a 19.8% return on assets, indicate the business converts revenue into profit at an exceptional rate while deploying its asset base efficiently [profitability.operating_margin_pct, profitability.net_margin_pct, profitability.roa_pct].
- Quarterly revenue has risen consistently from $11,079,166,000 in 2025Q2 to $12,249,757,000 in 2026Q1, and net income surged to $5,282,791,000 in 2026Q1 after a mid-cycle trough, signaling renewed earnings momentum [momentum.revenue_quarterly, momentum.net_income_quarterly].
Bear Case
- Netflix pays no dividend and has no mapped dividend history, meaning investors receive no current income and must rely entirely on capital appreciation for returns [dividend.none].
- Net income was volatile on a quarterly basis, dipping from $3,125,413,000 in 2025Q2 to $2,418,521,000 in 2025Q4 before recovering sharply, suggesting earnings can be uneven within a fiscal year [momentum.net_income_quarterly].
- Netflix is not assigned to any of the 24 tracked macro themes, meaning it does not benefit from incremental model score tied to macro-tailwind exposure, a neutral but limiting factor for the composite [theme.none].
What Could Change the Picture
Bullish Triggers
- If Netflix were assigned to one or more macro themes reflecting structural tailwinds, the composite score could improve materially from its current level [theme.none].
- Sustained acceleration in quarterly net income beyond the 2026Q1 level of $5,282,791,000 would reinforce that the mid-cycle earnings softness was temporary and that operating leverage is durable [momentum.net_income_quarterly, profitability.net_margin_pct].
Bearish Triggers
- A reversal in the unbroken quarterly revenue growth trend—which has risen each period from 2025Q2 through 2026Q1—would undermine the momentum thesis that currently supports a high factor score [momentum.revenue_quarterly].
- A meaningful compression in operating or net margins from their FY2025 levels of 29.5% and 24.3% respectively would signal that the operating leverage driving outsized earnings growth is eroding [profitability.operating_margin_pct, profitability.net_margin_pct].
Risk Profile
Low RiskThe model assigns Netflix a Low risk rating, supported by consistently rising quarterly revenues across the last four reported periods and a sharp recovery in operating income to $3,956,997,000 in 2026Q1 after a mid-cycle trough [momentum.revenue_quarterly, momentum.operating_income_quarterly]. The company holds $55,596,993,000 in total assets as of FY2025, providing a substantial balance-sheet foundation, though the financial health factor specifics beyond this figure are not fully detailed in the available filing evidence [financial_health.total_assets].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.