In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Dividends are the cleanest and most straightforward measure of cash flow because these are clearly cash flows that go directly to the investor.
Paying users area
Try for free
Netflix Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
- Aggregate Accruals
Intrinsic Stock Value (Valuation Summary)
|Year||Value||DPSt or Terminal value (TVt)||Calculation||Present value at|
|1||DPS1||= × (1 + )|
|2||DPS2||= × (1 + )|
|3||DPS3||= × (1 + )|
|4||DPS4||= × (1 + )|
|5||DPS5||= × (1 + )|
|5||Terminal value (TV5)||= × (1 + ) ÷ ( – )|
|Intrinsic value of Netflix Inc. common stock (per share)|
|Current share price|
Based on: 10-K (reporting date: 2021-12-31).
1 DPS0 = Sum of the last year dividends per share of Netflix Inc. common stock. See details »
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.
Required Rate of Return (r)
|Rate of return on LT Treasury Composite1||RF|
|Expected rate of return on market portfolio2||E(RM)|
|Systematic risk of Netflix Inc. common stock||βNFLX|
|Required rate of return on Netflix Inc. common stock3||rNFLX|
1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).
3 rNFLX = RF + βNFLX [E(RM) – RF]
= + [ – ]
Dividend Growth Rate (g)
Company does not pay dividends.