How Much Is Netflix Worth?
Netflix had a banner year in 2020 due to the pandemic, but is having trouble keeping up the explosive momentum in 2021. The streaming entertainment company added 4 million new subscribers in the first quarter of 2021 but missed the target by 2 million.
The latest earnings report shows Netflix beat new subscriber estimates for the second quarter with 1.54 million (instead of 1.19) and managed to turn out a slightly higher earnings per share. “Bridgerton,” “The Queen’s Gambit” and “Lucifer” continue to be viewer favorites.
In addition, “Shadow and Bone” and “Sweet Tooth” are new 2021 releases that drew 55 to 60 million viewers each, helping Netflix achieve double the profits of last year so far, even if investor expectations — and the share price — have taken a hit.
|Netflix: Company Snapshot|
|Headquarters||Los Gatos, California|
|Founders||Reed Hastings and Marc Randolph|
|CEO||Reed Hastings and Ted Saranos|
What is Netflix Worth Now?
Based on market cap, the company’s worth is $228.60 billion. Despite the challenges from competitors and slower subscriber growth, Netflix is holding steady from GOBankingRates’ last assessment of $225.79 billion in 2020.
|What Is Netflix Worth?|
|Netflix Share Price, YTD range||$485.81 – $586.34|
|Netflix Market Cap, YTD range||$228.60 – $233.78 billion|
|Revenue (last 12 months)||$27.585 billion|
|Profit (last 12 months)||$11.666 billion|
|Income (2nd quarter 2021)||$7.342 billion|
|Outstanding shares||433.1 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 Worth: Market Cap Range
As mentioned, current Netflix’s worth is $228.60 billion based on market cap, as of Aug. 2, 2021. Netflix is a large-cap company and no. 27 on the S&P 500. In addition, a PwC report in May ranked Netflix as the 36th largest company based on market share. Share prices this year have fluctuated between $485.81 and $586.34, the highest price achieved on January 20 of this year.
How To Calculate Netflix 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 June 30, 2021.
|What Is Netflix Worth Now?|
|Total Assets||$41 billion|
|Total Liabilities||$27.1 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 expand, albeit slower than the early pandemic days of 2020. Although content releases are slower in 2021 due to COVID-19, Netflix 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 Second Quarter Ending June 30
Although Netflix has faced some challenges since its promising past year, it appears viewers are still tuned in. Netflix’s 2nd quarter highlights for 2021 include:
- Revenue: $7.342 billion
- Year-over-year revenue growth: 19.4%
- Quarterly earnings per diluted share of: $2.97 (down from first quarter’s $3.75)
- Operating margin: 25.2%
- Global streaming memberships: 209.18 million
- Membership growth compared to the previous year: Up 8.4%
Netflix slightly beat the forecast subscriber numbers and revenue due to “an 11% increase in average paid streaming memberships and 8% growth.” Viewership is down for 2021 compared to one year ago, which could be expected due to last year’s lockdowns when more people were home.
Current Top 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:
Netflix Top Shareholders:
- The Vanguard Group: 7.07%
- Capital Research & Management: 6.44%
- T. Rowe Price & Associates: 4.40%
- BlackRock Fund Advisors: 4.29%
- Fidelity Management & Research: 4.16%
- Capital Research & Management: 3.81%
- SSgA Funds Management: 3.57%
- Capital Research & Management: 3.05%
- Baillie Gifford & Co.: 1.85%
- Jennison Associates LLC: 1.65%
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. This may be one of the causes of the downward trend of the stock. 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 (PE) ratio is high at 53.95. 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, 27 analysts recommend Netflix as a “Buy,” 6 say “Hold” and 4 suggest “Sell.” The NFLX stock price target is between $342 and $971, for an average share price of $619.67. 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.
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- MarketWatch. 2021. "Opinion: Should You Buy Netflix Stock? Here’s Why It’s Only Worth Half of Its Current Price."
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