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    Netflix (NFLX) Stock Could Be 20% Undervalued As Theatrical Plans Shift

    Simply Wall St·09/15/2026 22:22:15
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    Netflix has delivered a 96.7% share price gain over the past three years. The real question for you now is whether that move is still grounded in the cash the business can generate over time.

    • A 96.7% rise in three years puts Netflix in the spotlight, since almost a doubling in price raises the bar for what its future cash flows need to deliver.
    • New efforts in advertising, live sports, gaming and even longer theatrical runs can reshape how quickly Netflix turns its content spending into cash and how predictable those flows look.
    • If you'd rather focus on earnings, this one's for you. See what Netflix's 23.8x P/E says about the price.

    The issue now is whether the current share price is adequately explained by the cash flows implied by Netflix's business today and in the years ahead.

    If you want to pressure test Netflix against other potential ideas using the same cash flow lens, compare it with companies in the 34 high quality undervalued stocks

    Is Netflix Still Cheap on Cash Flow?

    The Discounted Cash Flow (DCF) model used here focuses on the cash Netflix can return to shareholders over time. On this view, the latest twelve month Free Cash Flow sits at about $11.3b, and analysts on the model expect that figure to grow further by the end of the decade. This points to a business already generating sizeable excess cash today rather than relying purely on distant hopes.

    Because the projections in this model show Free Cash Flow rising into the 2030s, the DCF output suggests an intrinsic value that is meaningfully above the current share price of $77.93. The move to report box office revenue for longer theatrical releases aligns with that cash story, because it gives Netflix another way to monetise big titles and potentially smooth the link between content spending and future Free Cash Flow, which the model already assumes will keep building. Find out what Netflix could be worth using our Discounted Cash Flow (DCF) estimate.

    The Netflix Narrative: What Would Justify Today's Price?

    Simply Wall St Narratives for Netflix act as the bridge between the valuation puzzle above and the specific stories that could justify a higher or lower share price. Each scenario on the Community page spells out the assumptions on growth, profitability and earnings that would need to hold. Instead of relying on a single multiple or model line, it lays out the moving parts so you can track those assumptions against Netflix's reported results over time.

    Netflix now splits the community between investors who see a durable cash engine and others who question how much upside is left at this price.

    Bull case: roughly fairly valued

    "Management also reaffirmed 2026 revenue guidance of $50.7 billion to $51.7 billion and a 31.5% operating margin target…"

    Discover why this Narrative puts Netflix at roughly fairly valued.

    Bear case: roughly fairly valued

    "In the first half of 2026, members watched more than 97 billion hours of Netflix, up 2 percent from a year earlier…"

    Explore why this Narrative puts Netflix at roughly fairly valued.

    One more thing on Netflix before you lean on the numbers

    Before you lean too heavily on the valuation work, it is worth knowing that Simply Wall St’s broader checks have flagged some potential areas of concern around Netflix that merit a closer look. Take a closer look at 2 warning signs before settling on a valuation.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.