How Much Is Netflix Worth?
Netflix was struggling a bit to gain subscribers in Q2 due to COVID-related production delays in 2020, but Q3 has delivered more positive results. The streaming entertainment company added 4.4 million new subscribers in the third quarter of 2021, which was a healthy increase over the 1.5 million added in Q2, for a total of 214 million paid memberships.
The latest earnings report shows Netflix beat new subscriber estimates for the third quarter with 4.4 million (instead of 3.5) and managed to turn out slightly higher earnings per share. “Bridgerton,” and “The Queen’s Gambit” continue to be viewer favorites.
In addition, “Squid Game,” released on Sept. 17, has become the streaming giant’s biggest TV show ever. A whopping 142 million households across the globe watched the show in its first four weeks.
|Netflix: Company Snapshot|
|Headquarters||Los Gatos, California|
|Founders||Reed Hastings and Marc Randolph|
|CEO||Reed Hastings and Ted Saranos|
How Much Is Netflix Worth Now?
Based on market cap, the company’s worth is $289.09 billion as of Oct. 22, up from $235.34 billion at the last earnings call in Q2.
|How Much Is Netflix Worth?|
|Share Price, YTD Range||$463.41 – $665.46|
|Market Cap, YTD Range||$231.57 billion – $294.26 billion|
|Revenue (Last 9 Months)||$22.988 billion|
|Profit (Last 9 Months)||$11.666 billion|
|Income (2nd Quarter 2021)||$7.483 billion|
|Outstanding Shares||442.7 million|
What Is Market Capitalization?
Market capitalization is based on a company’s share price and the number of shares available. To calculate Netflix worth, multiply the current price of the stock by the total number of outstanding shares. Since stock prices fluctuate throughout the day, a company’s market capitalization can change. Ranges are helpful to give you an idea of a company’s highs and lows for a desired period of time.
Netflix’s Market Cap
As mentioned, Netflix’s market cap is $289.09 billion as of Oct. 22. Netflix is a large-cap company and No. 20 on the S&P 500. In addition, a PwC report in May ranked Netflix as the 36th largest company based on market capitalization as of March. Share prices this year have fluctuated between $463.41 and $665.46, the highest price achieved on Oct. 22 of this year.
How To Calculate Netflix’s Net Worth
To calculate net worth, subtract liabilities from assets. You can also refer to the company’s financial reports, typically released annually and quarterly. Take a look at key figures from Netflix’s most recent shareholder report as of Oct. 19.
|Netflix’s Assets and Liabilities|
|Total Assets||$42.7 billion|
|Total Liabilities||$27.4 billion|
Founders: Reed Hastings and Marc Randolph
The popular story is that Netflix started when Hastings was hit with a $40 late fee on an “Apollo 13” video rental. However, the story isn’t entirely true, since Netflix initially charged late fees itself. Randolph worked for Hastings at a Silicon Valley software company named Pure Atria. At the time the two started brainstorming a better video rental service, Pure Atria was undergoing a merger and they were in search of the next project.
Randolph was CEO until he stepped down in 1999, making big decisions including turning down a buyout offer from Amazon. He did not stick around for Netflix’s major growth, although he says in his book, “That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea,” that he’s OK with his decision. When Randolph stepped down, co-founder Reed Hastings took his place as CEO to witness Netflix become the major company it is today.
Key Product Lines Contributing to Revenue
Netflix relies on subscribers for the bulk of its income. It continues to invest in new content for a U.S. and growing international market. It plans on keeping subscribers and attracting new ones with:
- Original and non-fiction series
- U.S. and international markets
- Expansion into live-action and animated films
- Interactive games: “Black Mirror: Bandersnatch” and “Stranger Things”
Earnings Highlights From Netflix’s Fiscal 3rd Quarter Ending Oct. 19
Although Netflix has faced some challenges since its promising past year, its revenue continued to increase in Q3 and it’s expecting its strongest Q4 content offering yet, which bodes well for streaming service. Netflix’s third-quarter highlights for 2021 include:
- Revenue: $7.483 billion
- Year-over-year revenue growth: 16.3%
- Quarterly earnings per diluted share: $3.19 (up from second quarter’s $2.97)
- Operating margin: 23.5%
- Global streaming memberships: 213.56 million
- Membership growth compared to the previous year: Up 9.4%
Netflix’s Top 10 Shareholders
Asset managers and mutual funds are the company’s top shareholders. Here is a closer look at which institutions have the most stake in Netflix shares:
- The Vanguard Group: 7.12%
- Capital Research & Management: 6.68%
- Capital Research & Management: 4.34%
- BlackRock Fund Advisors: 4.07%
- Fidelity Management & Research: 3.94%
- T. Rowe Price & Associates: 3.89%
- SSgA Funds Management: 3.64%
- Capital Research & Management: 2.98%
- Baillie Gifford & Co.: 1.84%
- Geode Capital Management LLC: 1.55%
How Does the Future Look for Netflix?
While Netflix is currently meeting — and slightly exceeding — projections, the company’s share price is under pressure. Shareholders are concerned about Netflix’s future ability to monetize content and how competing streaming services could take market share from the leader. According to Netflix’s shareholder report and Nielsen figures, TV share time is distributed as follows:
No longer the clear market leader when it comes to streaming, Netflix has its work cut out. However, the company assures shareholders that there is a viable future growth plan if they continue to invest in international markets, continue producing original content and expand into interactive gaming.
Is Netflix Worth the Money?
Netflix’s current price-to-earnings ratio is high at 58.84. You don’t get the most bang for your buck at this rate, but it isn’t necessarily a dealbreaker, either. Remember there is more to investing than one or two ratios.
According to the Wall Street Journal, 29 analysts recommend Netflix as a “Buy,” nine say “Hold” and three suggest “Sell.” The NFLX stock price target is between $342 and $800, for an average share price of $677.48. At its current price, it appears Netflix is worth the money. However, doing your research to determine your level of comfort with the company’s prospects — and where you believe Netflix will be in the future — is essential.
Cynthia Measom contributed to the reporting for this article.
Data is accurate as of Oct. 22, 2021, and subject to change.
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- Netflix. 2021. "FINAL Q3 21 Shareholder Letter."
- CNN Business. "Netflix Inc."
- PwC. 2021. "Global Top 100 companies by market capitalisation."
- The Wall Street Journal. "Netflix Inc."