SENTINEL 360 · FREE VALUATION PREVIEW
Understand the price.
Examine the assumptions.
Netflix · NASDAQ: NFLX · USD per share
Research snapshot: October 26, 2026. Financials through September 30, 2026. This is a dated educational example, not a current market quote. Enter your own reference price below.
Your valuation range
Original assumptionsCompare the methods
| Method | Bear | Base | Bull |
|---|
Owner earnings is a no-growth capitalization cross-check, not Warren Buffett’s valuation of Netflix. It should not be averaged with the growth DCF.
Make the assumptions your own
Try increasing the discount rate, slowing growth, or requiring a larger margin of safety. Watch how much the estimate changes. A valuation is a conditional calculation—not a promise of what a stock will trade for.
Understand the terms
DCF: discounted cash flow converts estimated future business cash into a value today. Higher growth raises the estimate; a higher required return generally lowers it.
Owner earnings: cash potentially available to owners after maintaining the business. Our conservative cross-check assumes no growth and charges stock compensation. It is inspired by Buffett’s framework, not a valuation supplied or endorsed by Warren Buffett.
Margin of safety: a discount you require below your own estimated value. A 30% safety price is estimated value × 70%. It cannot prevent a loss or correct an inaccurate estimate.
WACC: the required return used to discount cash available to both debt and equity investors. Terminal growth must stay below WACC.
Terminal dependence: the share of discounted enterprise value coming from cash flows beyond year ten. A large percentage means distant assumptions drive much of the result.
Read the results carefully
Bear, base and bull are illustrative scenarios, not probabilities or price targets. Negative discount-to-value means the price you entered is above that modeled value. The owner-earnings check deliberately excludes growth, so it should not be averaged with the growth DCF.
All calculations run in your browser. Your assumptions are not saved; reload restores the example. Financial inputs are fixed to the dated research snapshot. This preview does not retrieve stock prices, provide alerts, or execute trades.
Follow the calculation
Cash-flow normalization and methods
Owner earnings: 9-month operating cash flow of $10,196.296M less $693.540M of property and equipment spending, $405.440M of stock compensation, and the after-tax portion of the $2,800M one-time termination fee. Annualize the result by 12/9. All cash content investment remains charged. Capitalize at each scenario’s required equity return with no growth; no second debt deduction.
DCF: $12,000M of FY2026 company FCF guidance, less the assumed after-tax termination fee and annualized stock compensation, plus annualized after-tax interest of $622.463M × 12/9 × (1 − tax rate). Project this FCFF proxy for ten years, then add a perpetuity. Discount at WACC, subtract $7,113.850M adjusted net debt and any extra operating cash reserve, and divide by 4,195.127M diluted shares.
The share count is Q3 diluted weighted-average shares, already adjusted for the 10-for-1 split. It is a proxy for current diluted shares. No future buyback benefit is modeled. Maintenance spending is not separately disclosed; all P&E and content cash spending are retained. The fee’s actual cash-tax timing is uncertain. The model uses rolling annual periods with end-year discounting and no calendar stub adjustment.
Default growth rates for years 1–5 / 6–10: bear 4% / 2%, base 10% / 6%, bull 15% / 9%. WACC: 11% / 9% / 8%. Terminal growth: 2% / 2.5% / 3%. Starting cash multipliers: 90% / 100% / 110%. Owner returns: 12% / 10% / 9%. These are illustrative analyst assumptions, not company forecasts.
Sources and refresh limitations
- Netflix Q3 2026 shareholder letter — financial statements, shares, net debt and guidance.
- Netflix Q1 2026 shareholder letter — one-time termination fee.
- Berkshire Hathaway 1986 letter — owner-earnings framework.
This is an original educational calculation using selected company-reported financial facts and explicitly stated assumptions. Source reports remain on their publishers’ sites. No third-party valuation feed, screenshots, or proprietary estimates are included. Check newer filings before using the example for research.