Netflix, Inc. (NFLX): fair value, margin of safety and Wheel Score

Is NFLX undervalued?

NFLX closed at 72.61 on 16 Oct 2026, 18% below the GLS average fair value of 89.02 from 8 models (4 of them above the price). That is a moderate margin of safety: the stock passes the "below fair value" rule of the Sunday Scan, and the Wheel Score gives it 20 of the 25 Value points.

The 8 models disagree widely: Graham Number gives 22.97 while GLS Growth gives 199.47. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files NFLX under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.

Nine valuation models for NFLX

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

On financial health NFLX scores 7/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is 9.6 out of 10, built from ten years of revenue, earnings, margins, cash flow, share count and returns on capital scored for consistency - a high reading that points to a durable business.

Returns on capital are high - ROIC 26.7%, ROE 41.3%, ROA 19.8% - with debt at 0.54 times equity and a free-cash-flow yield of 3.6%.

Netflix, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Streaming 100% (fiscal year FY2025).

Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 7/10 on the GLS smart-money scales; the last recorded Congressional buy was on 12 Aug 2026.

Wheel Score 89: Prime

NFLX scores 89 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 20/25), Piotroski health (16/20), the GLS moat (14/15), the option premium on offer (20/20) and how easily the stock trades (19/20).

Implied volatility is 47% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 1,695,448 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 40.1M shares a day on a market cap of $302.3B, with a beta of 1.61 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 19 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

Netflix, Inc. reports earnings on 20 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Entertainment

The 12 companies below are the closest to Netflix, Inc. by market cap within the Entertainment industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

⚖ Compare NFLX with 7 of them   All Communication Services stocks →